Advisors working on property and land deals in Wales should now be prepared for the new Land Transaction Tax (LTT) legislation, which came into effect on 1st April 2018 and replaces Stamp Duty Land Tax (SDLT).
Whilst there will be no first-time buyer relief, first-time buyers in Wales should note that the £180,000 threshold value for LTT is higher than the SDLT threshold of £125,000.
How will LTT work?
Instead of filing an SDLT form with HMRC, professionals will be required to work with the new Welsh Revenue Authority (WRA), a department of the Welsh government, responsible for collecting and managing Land Transaction Tax.
The WRA will collect and manage the revenue and have also been responsible for developing the guidance to help taxpayers and their agents in ensuring they comply with their obligations. These are all now available online.
What does this mean for conveyancers?
It is vital that advisors understand how the provisions will apply to future land transactions and any differences between the new LTT legislation and the current SDLT provisions. As well as having to understand the procedures for the filing of the LTT returns, solicitors and conveyancers will also have to register with the WRA to use electronic filing. The next 18 months will certainly prove interesting for professionals in the industry.
Anti-abuse rules are also built into the legislation and set out when relief is available on land transactions where the primary purpose of the land transaction is a tax advantage.
LTT is now live and you will need to know how and when LTT is payable and how the tax is calculated and collected.
To save you time, we can file your LTT returns instead and offer guidance and advice on the more complex land transactions in Wales.
As we have already registered with the WRA and have attended the practical demonstrations of the LTT systems and software, we can file LTT returns online to ensure that our clients meet their tax liabilities effectively and promptly.
While the LTT legislation sets out to improve the processes surrounding the buying and selling of land, there is no doubt it will take a great deal of getting used to. If you want to take the headache out of LTT compliance, please contact our specialist advisors on 0118 40 50 025 or visit our website at www.griffithsallen.co.uk .
Griffiths Allen provides Stamp Duty Land Tax (SDLT) and Land Transaction Tax (LTT) advice and compliance services to the residential conveyancing profession, as well as professionals involved in commercial property transactions.
