April 2018 sees the introduction of LTT (Land Transaction Tax) which is the devolved Welsh governments equivalent of SDLT (Stamp Duty Land tax)
Whilst the majority of reliefs and rules will mirror that of SDLT, there is one element of difference, the rates and the bandings, which are different to the current SDLT (England) rates which are still applicable until April 2018.
The LTT rates (below) and a quick view reveals that lower valued properties gain a favourable saving under the LTT rates over current SDLT rates. But as properties get more expensive, they are taxed at a greater rate under LTT than currently under SDLT.
http://gov.wales/funding/fiscal-reform/welsh-taxes/land-transaction-tax/?lang=en
LTT Residential Rates
| Price Threshold |
Rate |
| £0 - £150,000 |
0% |
| £150,000 - £250,000 |
2.5% |
| £250,000 - £400,000 |
5% |
| £400,000 - £750,000 |
7.5% |
| £750,000 - £1,500,000 |
10% |
| £1,500,000 + |
12% |
LTT Non-Residential Rates
| Price Threshold |
Rate |
| £0 - £150,000 |
0% |
| £150,000 - £250,000 |
1% |
| £250,000 - £1,000,000 |
5% |
| £1,000,000 + |
6% |
As with SDLT, an additional 3% surcharge will apply for the purchase of additional residential properties - exactly the same rules as for SDLT and also the same reliefs (multiple dwelling relief, etc).
There will be no higher 15% rate, on the purchase of residential property over £500,000 by a “non-natural person” such as a company, as this is not seen as relevant for LTT. This differs from SDLT and may be useful for some.
Current SDLT Residential Rates
| £0 - £125,000 |
0% |
| £125,000 - £250,000 |
2% |
| £250,000 - £925,000 |
5% |
| £925,000 - £1,500,000 |
10% |
| £1,500,000 + |
12% |
Current SDLT Non-Residential Rates
| £0 - £150,000 |
0% |
| £150,000 - £250,000 |
2% |
| £250,000 + |
5% |
|
|
If you want to know more about LTT, SDLT or the Scottish equivalent (LBTT), how these taxes work and what impact they have on your business decisions, then don't leave this to chance, speak to your advisors or speak to us, our VAT advice is not as expensive as you think. VAT.tamworth@hwca.com
