Bare trusts and Land Transaction Tax: who files and pays?
Bare trusts and LTT
For most Welsh property purchases through a bare trustee or nominee, LTT treats the person behind the trustee as the buyer.
- That person normally makes the LTT return and pays any tax due.
- The trust terms and the trustee’s real powers are central.
- Lease grants follow a special rule: the bare trustee is treated as buyer or seller of the lease.
Scroll down for the full analysis.
Read the original guidance here:
Bare trusts and Land Transaction Tax: who files and pays?
When Welsh property is bought through a bare trustee or nominee, that person may hold it solely for you rather than exercise independent control. The tax position normally follows your interest.
Usually, LTT looks through the trustee to you. You are usually treated as the buyer for Land Transaction Tax, often called stamp duty. The LTT return and tax are therefore usually in your name.
A new lease has a different rule.
What this rule is about
A trust can separate the person named on the paperwork from the person who really controls the property. A bare trust is the simple version. Someone else controls the outcome.
The trustee holds the property for that person. The trustee has little choice over it.
For LTT, the name on the title is not always the name that matters. Identify who holds rights and directs the trustee.
That distinction can decide who must deal with the Welsh Revenue Authority.
What the official source says
The Welsh Revenue Authority’s guidance explains that a bare trust exists where a person is absolutely entitled against the trustee.
In everyday terms, a person who can obtain the property or require the trustee to deal with it as directed, even after notice required by the trust terms, has those rights. That is the practical test.
- A person behind the trust can receive the property straight away, or after giving any notice required by the trust terms.
- Without that person’s permission, the trustee cannot deal with the property.
- More than one person can have those rights together.
- Even where unpaid taxes, costs or other trust expenses remain outstanding, a trustee can hold back property only to meet those amounts. That right is limited.
- By itself, that limited right to meet expenses does not stop the person being absolutely entitled.
- The rule also covers a person under 18, or a person who lacks capacity, where that person would otherwise have those rights against the trustee. Their position is still covered.
For most property purchases, the law treats a bare trustee’s actions as those of the person or people for whom the trustee holds the property. If a nominee buys a house for you, LTT normally treats you as the buyer.
That result matters because, where the transaction must be reported, the buyer makes an LTT return and pays any LTT due. The buyer is responsible.
The guidance puts the return in the beneficiary’s name, rather than the bare trustee’s name.
What this means in practice
The contract signatory may not handle LTT. A trustee may sign or hold the legal title, while you are still the person treated as buying the property for tax purposes.
This is the part people get wrong: describing somebody as a nominee does not settle the issue when their actual powers and your actual rights point elsewhere. Those facts decide it.
- Check whether the person named as trustee can make decisions without your approval.
- If they cannot, the arrangement may be a bare trust.
- For a property purchase through a bare trustee, prepare the LTT return in the name of the person treated as buyer.
- Make sure the purchase documents and trust documents tell the same story.
- Keep the documents that show why the trustee was acting for you.
The Welsh Revenue Authority page is guidance, not legislation. Schedule 8 to the Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 gives the rule its legal effect.
How to analyse it
Start with the trust terms. Do not rely on the label used by the estate agent, lender or conveyancer. Then work through the rights step by step.
- Is property held by one person for another person?
- Can the person behind the trust demand the property or direct its sale or transfer?
- Does the trustee have a real power to choose what happens to it?
- Does the trustee only have a limited right to recover costs or other outgoings?
- Is the transaction a purchase of property, or is someone being granted a lease?
- Who does the law treat as the buyer once those facts are clear?
If the trustee has wider powers, the arrangement may not be a bare trust. The different rules for other trusts may then matter.
This page does not decide those other cases.
Example
Gethin pays £250,000 for a property in Wales.
His sister, Nia, appears on the contract and title solely as his nominee.
Their written agreement says Gethin can require Nia to transfer the property to him. It also says she cannot sell or deal with it without his instructions.
On those facts, the arrangement has the features of a bare trust. For LTT, Nia’s purchase is treated as Gethin’s purchase.
If an LTT return is required, it should be made in Gethin’s name. He is the person responsible for any LTT.
Change one fact and the answer may change. If Nia could decide herself whether to sell, keep or invest the property, Gethin may not be absolutely entitled in the required way.
Why this can be difficult in practice
Trust paperwork is often brief, old or missing. Family arrangements can also be informal.
That makes it tempting to focus on whose name appears at the Land Registry. For this rule, that is not enough.
Leases need extra care. The normal look-through rule does not apply when a lease is granted.
- For a granted lease, the bare trustee counts as buyer of the whole lease.
- In that situation, the trustee has the buyer’s LTT responsibilities.
- If a bare trustee grants a lease, the trustee counts as the seller of that lease.
- Do not apply the normal bare-trust rule to a lease grant without checking this exception.
- Separate documents may show a different picture from the one suggested by the title register alone.
Key takeaways
- A bare trustee normally does not change who LTT treats as the buyer.
- The person with the right to direct the trustee will usually file and pay.
- A grant of a lease is a special exception and needs separate checking.
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 8 para 2 — when a trust counts as a bare trust
- LTTA 2017 Schedule 8 para 3 — treating the beneficiary as acting through a bare trustee; special treatment for grants of leases
- LTTA 2017 section 7 — identifying the buyer and seller in a land transaction
- LTTA 2017 section 44 — the buyer’s duty to make an LTT return
- LTTA 2017 section 56 — the buyer’s responsibility to pay land transaction tax
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 a trust is bare depends on its terms and on the rights the trustee actually has.
- A label such as nominee, simple trust or bare trust does not settle the question by itself.
- The supplied statutory library does not state its currency date, so the current text should be checked before relying on it for a live transaction.
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 trust deed, declaration of trust or nominee agreement
- Any written power allowing the trustee to manage, sell or otherwise deal with the property
- Evidence of who can demand the property or direct the trustee
- The contract and lease documents where the transaction involves a lease
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 Bare trusts and Land Transaction Tax: who files and pays? [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 8 para 2 - when a trust counts as a bare trust https://www.legislation.gov.uk/anaw/2017/1/schedule/8/paragraph/2 - LTTA 2017 Schedule 8 para 3 - treating the beneficiary as acting through a bare trustee https://www.legislation.gov.uk/anaw/2017/1/schedule/8/paragraph/3 - LTTA 2017 Schedule 8 para 3 - special treatment for grants of leases https://www.legislation.gov.uk/anaw/2017/1/schedule/8/paragraph/3 - LTTA 2017 section 7 - identifying the buyer and seller in a land transaction https://www.legislation.gov.uk/anaw/2017/1/section/7 - LTTA 2017 section 44 - the buyer's duty to make an LTT return https://www.legislation.gov.uk/anaw/2017/1/section/44 - LTTA 2017 section 56 - the buyer's responsibility to pay land transaction tax https://www.legislation.gov.uk/anaw/2017/1/section/56 Guidance page from the Welsh Revenue Authority on this topic (guidance, not law): https://www.gov.wales/land-transaction-tax-trusts-technical-guidance#5988 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 a trust is bare depends on its terms and on the rights the trustee actually has. - A label such as nominee, simple trust or bare trust does not settle the question by itself. - The supplied statutory library does not state its currency date, so the current text should be checked before relying on it for a live transaction. 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: Bare trusts and Land Transaction Tax: who files and pays?
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