LTT Group Relief: Joint Venture Exit Arrangements
Joint venture clauses and LTT group relief
A properly limited exit or voting-rights clause may not stop LTT group relief. The key questions are the trigger, whether it has happened, and who controls the outcome.
- Only specified contingency arrangements qualify
- The protection ends when the relevant event occurs
- Members must not dictate terms or timing in advance
Scroll down for the full analysis.
Read the original guidance here:
LTT Group Relief: Joint Venture Exit Arrangements
A joint venture can include sensible exit clauses without automatically losing LTT group relief. LTT is Wales’s land tax, rather than stamp duty. But the protection is narrow: the clause must deal with a genuine named risk, and no member can control its terms or timing in advance.
What this rule is about
Group relief can remove LTT from a property transfer between companies in the same group, although planned changes in control, outside funding, or a planned group break will usually stop that relief. That outcome is deliberate.
Group relief is for transfers within a real group, not for a pre-planned sale outside it.
Joint ventures work differently. Their members often agree what happens if one party leaves, fails, or gets into financial trouble, and the law allows some of those safety-net arrangements without treating them as arrangements that block group relief. That protection is limited.
What the official source says
Guidance from the Welsh Revenue Authority describes an exception for a joint venture company. Where its arrangements would otherwise stop group relief, the exception can apply, but only if the arrangements are one of two types and none of the relevant events has yet happened. That timing matters.
- An agreement can provide for shares or securities in the joint venture company to pass to one or more members.
- The transfer must happen on, or because of, a named event.
- A constitutional document can instead provide for a member’s voting rights to be suspended.
- A constitutional document means the articles, memorandum, or a similar document that governs the company.
- The voting suspension must also depend on a named event.
Instead, the named events cover problems that joint venture members may reasonably plan for, rather than events they expect or want to happen.
- A member chooses to leave.
- A member enters insolvency proceedings, or similar overseas proceedings.
- A member’s financial position seriously worsens.
- Control of a member changes.
- A member breaks an agreement with the other members or the joint venture company.
- An outside change threatens the joint venture’s ability to survive.
- The members have an unresolved disagreement.
- A similar unwanted event was provided for when the arrangements were made.
What this means in practice
A genuine contingency clause need not, by itself, spoil LTT group relief before the event happens, but that does not mean that every exit clause is safe. Control remains decisive.
What matters most is control. A member cannot use this exception if it can, alone or with connected people, dictate the terms or timing of the share transfer or voting suspension before the named event.
That distinction sounds technical. It can decide whether relief is available.
- Check that the company is a joint venture company under the statutory definition.
- Check that the clause is in an agreement or constitutional document.
- Match the trigger to a listed event, or a genuinely similar unwanted event.
- Check whether that event has already happened.
- Review who can trigger, shape, delay, or bring forward the result.
- Remember that membership alone does not make joint venture members connected for this particular test.
How to analyse it
Start with the wider group relief position. The buyer and seller must be companies in the same group at the relevant time. Then ask whether there are arrangements that would normally prevent the relief.
Only then consider this joint venture exception. It does not replace the other requirements for group relief.
- Is there a company with at least two member companies?
- Does it carry on a commercial activity under an agreement governing its members’ affairs?
- Which document contains the relevant clause?
- Does the clause deal with a share transfer or suspended voting rights?
- What exact event triggers that result?
- Has the event occurred?
- Could any member, with connected people if necessary, dictate the terms or timing before that event?
- Are there other arrangements that affect the group relief claim?
Example
Imagine two companies each hold 50% of a joint venture company. Its articles say that, if either member enters administration, the other member may acquire its shares. The joint venture company later receives property from another company in its group.
Before either member enters administration, that clause may fall within the exception. It is a pre-agreed response to a listed contingency. The clause should not be treated as an arrangement blocking group relief for that reason alone.
Change one fact: one member can decide whenever it wants that the other’s shares must transfer. That is not the same thing. If it can dictate the terms or timing before a contingency, the exception does not apply.
Why this can be difficult in practice
People often focus only on the label “joint venture”. That is not enough. To qualify for the exception, the company must meet the statutory definition, while the clause must have both the required form and the required trigger.
Side-letter wording can matter as much as the articles. A right that looks protective may give a member practical control over when an exit happens.
- A routine commercial exit is not automatically a listed contingency.
- A clause for a “similar” event needs a real comparison with the listed events.
- An event that was planned or intended from the start may not fit the final, similar-event category.
- Rights held by connected people can affect the control test.
- The exception operates only while the relevant contingency has not occurred.
- WRA guidance explains its view, but the legislation is the law.
Key takeaways
- LTT group relief can survive a genuine joint venture contingency clause.
- The clause must concern a listed, or closely similar, unwanted event.
- Pre-event control over the terms or timing can defeat the exception.
Technical analysis
For advisers, and for anyone who wants to check the law behind this page. You do not need this section to understand the guidance above.
Legislation
- LTTA 2017 Schedule 16 para 2 — group relief for companies in the same group
- LTTA 2017 Schedule 16 para 3 — meaning of companies in the same group
- LTTA 2017 Schedule 16 para 4 — arrangements that can prevent group relief
- LTTA 2017 Schedule 16 para 5 — joint venture contingency arrangements excluded from restrictions
Official guidance
The pages below are the Welsh Revenue Authority’s guidance. Guidance is not law. It sets out how the Welsh Revenue Authority reads the legislation, and it is not binding on you, on a tribunal or on a court. Where guidance and the legislation differ, the legislation wins. the Welsh Revenue Authority can also change or withdraw guidance, and it may not cover your facts.
Where this is not settled
- Whether an event is sufficiently similar to a listed contingency can depend on the facts and the wording of the arrangements.
- Whether a member can dictate the terms or timing before an event occurs may require a close review of rights held directly and by connected persons.
- The supplied statutory material records amendments in related provisions through 26 November 2024, but does not provide a separate currency notice confirming the law after that date.
Evidence you would need
This kind of case is decided on the facts of the individual property. These are the records that usually settle it, and the ones an adviser would ask you for.
- The joint venture agreement and any side agreements
- The articles of association or other constitutional documents
- Share and security ownership records
- Evidence of each member’s rights before any contingency
- Documents showing whether a listed contingency has occurred
- Details of connected persons and their relevant rights
Explore this with an AI
Readers often want to test their own situation. Copy the prompt below into ChatGPT, Claude or Gemini. It hands the model the actual legislation for this page rather than letting it answer from memory, and tells it to be explicit about what is uncertain. What comes back is information, not advice – check it against the links above.
I am researching Land Transaction Tax (LTT), the tax on property in Wales. It replaced Stamp Duty Land Tax in Wales on 1 April 2018, and SDLT does not apply in Wales. MY QUESTION LTT Group Relief: Joint Venture Exit Arrangements [Replace this with your own situation: what you are buying, the price, the dates, who the buyer is, and what you plan to do with the property.] THE LAW THIS TURNS ON - LTTA 2017 Schedule 16 para 2 - group relief for companies in the same group https://www.legislation.gov.uk/anaw/2017/1/schedule/16/paragraph/2 - LTTA 2017 Schedule 16 para 3 - meaning of companies in the same group https://www.legislation.gov.uk/anaw/2017/1/schedule/16/paragraph/3 - LTTA 2017 Schedule 16 para 4 - arrangements that can prevent group relief https://www.legislation.gov.uk/anaw/2017/1/schedule/16/paragraph/4 - LTTA 2017 Schedule 16 para 5 - joint venture contingency arrangements excluded from restrictions https://www.legislation.gov.uk/anaw/2017/1/schedule/16/paragraph/5 Guidance page from the Welsh Revenue Authority on this topic (guidance, not law): https://www.gov.wales/land-transaction-tax-group-relief-technical-guidance HOW I WANT YOU TO ANSWER 1. Work from the legislation above. Read it before answering. Guidance from the Welsh Revenue Authority is its view of the law, not the law, and does not bind a tribunal or a court. 2. Tell me what the rule actually requires, in plain English. 3. Tell me which facts decide the answer, and which facts would change it. 4. Tell me what evidence I would need to support the position. 5. Be explicit about anything unsettled or fact-sensitive. Do not guess. 6. Your training data has a cutoff and SDLT rates and reliefs change at fiscal events. Say so if you are not sure the law is current. POINTS ALREADY KNOWN TO BE UNCERTAIN ON THIS TOPIC - Whether an event is sufficiently similar to a listed contingency can depend on the facts and the wording of the arrangements. - Whether a member can dictate the terms or timing before an event occurs may require a close review of rights held directly and by connected persons. - The supplied statutory material records amendments in related provisions through 26 November 2024, but does not provide a separate currency notice confirming the law after that date. Do not give me a conclusion you cannot support from the provisions above.
Legislation links show the Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 as it stood on 2025-11-17. The law may have changed since, and the rules that apply are those in force on the date of your transaction. The official guidance this page is based on is here.
This page was last updated on 3 September 2026
Useful article? You may find it helpful to read the original guidance here: LTT Group Relief: Joint Venture Exit Arrangements
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