Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 section 14

Meaning of substantial performance

Section 14 defines what it means for a contract to be "substantially performed", which is the trigger point at which a land transaction tax charge can arise even if the transaction has not yet been formally completed.

• A contract is substantially performed when the buyer (or a connected person) takes possession of all or substantially all of the property, or when a substantial amount of the consideration is paid or provided.
• Taking possession includes receiving (or having the right to receive) rents and profits, regardless of whether possession is taken under the contract itself, a temporary licence, a lease, or a tenancy at will.
• Where no rent is involved, a substantial amount of consideration is treated as paid when all or substantially all of the purchase price has been handed over.
• Where rent is part of the deal, substantial performance is triggered by the first rent payment, or (if there is also non-rent consideration) whichever comes first: payment of substantially all the non-rent consideration or the first rent payment.

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