LTT when a connected company buys property at market value
Connected company transfers and LTT
When a connected company buys Welsh property, LTT can be based on market value even where the company pays little or nothing.
- Check whether the seller and company are connected.
- Use the property value at the effective date.
- Check separate exceptions, exemptions and reliefs.
Scroll down for the full analysis.
Read the original guidance here:
LTT when a connected company buys property at market value
If you transfer property to your own company, LTT rules may require Land Transaction Tax (LTT) to use its market value rather than the price paid. That is true even if no money changes hands. LTT is Wales’s property tax, rather than stamp duty.
What this rule is about
People often transfer a home, rental property or land to a company they control for business, family or ownership reasons, and the paperwork may show a very low price or nil. That happens.
That does not settle the LTT position. When the seller and buying company are connected, tax rules direct LTT to use market value—the value the property had on the relevant date—in place of the stated price. That distinction can change the tax bill.
What the official source says
In section 22, the Welsh Revenue Authority’s technical guidance sets out the rule for a company buyer when the seller is connected with it, or when the seller receives shares in a company connected with them. It does so directly.
- The statutory test can connect an individual seller or a company seller with the buying company.
- The rule can apply where the seller receives no money at all.
- It can also apply where shares form all or part of what the seller receives.
- The starting amount is the property’s market value at the effective date.
- For a lease granted at a rent, LTT adds the rent to that market value amount when calculating LTT.
- When the actual amount paid is higher, LTT uses the higher actual amount instead.
- A company includes any body corporate.
The guidance calls the amount used for tax “chargeable consideration”. In everyday terms, this is the amount the LTT calculation uses. Under this rule, it cannot be lower than the statutory market-value amount.
The usual exemption where nothing is paid does not apply here. However, LTT does not charge tax on every transfer. Another exemption or a relief can still apply if its own conditions are met.
What this means in practice
You cannot assume that a gift to your company avoids LTT just because the company pays nothing. Ask whether the company and seller meet the connection test under the tax rules.
Nor is this limited to cash sales. A transfer in return for shares can bring the rule into play. Facts outside the transfer deed, including who controls the companies involved, may determine the outcome. Check them carefully.
- Check the ownership and control of the buying company.
- Check the seller’s connection with that company.
- Check whether shares are part of the arrangement.
- Get evidence of the property’s value at the relevant date.
- Check whether a lease includes rent as well as a premium.
- Consider exemptions and reliefs separately from this rule.
How to analyse it
Work through the facts in order. Do not start with the price. Start with the people and companies involved, then test the value used for LTT.
- Is the buyer a company or other body corporate?
- Who is transferring the property?
- Are that seller and the buyer connected under the statutory test?
- If not, does the seller receive shares in a company connected with them?
- What was the property worth at the effective date?
- Is the transfer the grant of a lease that includes rent?
- Is the actual amount paid greater than the market-value amount?
- Does a section 23 exception apply?
- Does another exemption or relief apply?
What if the seller is not connected with the buyer and receives no relevant shares? This particular market-value rule may not apply. That does not, by itself, answer the wider LTT question.
Example
Illustration: Nia transfers a shop worth £400,000 to a company she controls. The company pays £1. If Nia is connected with the company, LTT uses £400,000, not £1. The example does not calculate tax, because the applicable LTT treatment must be checked separately.
Now change one fact. If the company pays £425,000, the LTT calculation uses the higher actual amount instead. Market value is a floor under this rule, not always the final figure.
Why this can be difficult in practice
Connection is not simply a matter of saying that a company is “your company”. The legislation uses connected-person rules. Ownership, voting rights, control and relationships can all matter.
Valuation can also be hard. When a property has planning potential, a short lease, unusual rights or development land, and the available evidence is limited, its value may not be obvious. A low agreed price is not proof of market value.
There are specific exceptions to the rule. The exceptions cover certain cases where a company holds property as trustee and some distributions of company assets. The conditions are narrow and fact-specific.
- Do not treat a nil payment as an automatic LTT exemption.
- Do not assume a token price controls the tax result.
- Do not overlook shares issued as part of the deal.
- Do not confuse a connected-company rule with every company purchase.
- Do not assume a statutory exception applies without checking all its conditions.
Key takeaways
- A connected company may be taxed on market value rather than the price paid.
- No payment does not automatically prevent LTT on these transfers.
- Connections, valuation, leases and possible reliefs all need 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 section 22 — market value rule for connected company buyers
- LTTA 2017 section 23 — exceptions to the connected company market value rule
- LTTA 2017 section 70 — how market value is defined for LTT
- LTTA 2017 section 74 — when people and companies are connected
- LTTA 2017 Schedule 3 para 1 — no-payment exemption for land transactions
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 people or companies are connected can depend on detailed ownership, control and family facts.
- Market value may need evidence where the property is unusual, has development potential, or is transferred with other rights.
- The supplied statutory material does not record a currency date, so the current wording and any relevant regulations should be checked before relying on this page.
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.
- A diagram showing the seller, buyer and any companies involved
- Details of who owns or controls each company
- The transfer document and details of everything given in return
- A valuation of the property at the effective date
- Lease terms, including any rent
- Details of any exemption, relief, trust arrangement or company distribution relied on
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 when a connected company buys property at market value [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 section 22 - market value rule for connected company buyers https://www.legislation.gov.uk/anaw/2017/1/section/22 - LTTA 2017 section 23 - exceptions to the connected company market value rule https://www.legislation.gov.uk/anaw/2017/1/section/23 - LTTA 2017 section 70 - how market value is defined for LTT https://www.legislation.gov.uk/anaw/2017/1/section/70 - LTTA 2017 section 74 - when people and companies are connected https://www.legislation.gov.uk/anaw/2017/1/section/74 - LTTA 2017 Schedule 3 para 1 - no-payment exemption for land transactions https://www.legislation.gov.uk/anaw/2017/1/schedule/3/paragraph/1 Guidance page from the Welsh Revenue Authority on this topic (guidance, not law): https://www.gov.wales/chargeable-consideration-technical-guidance#5180 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 people or companies are connected can depend on detailed ownership, control and family facts. - Market value may need evidence where the property is unusual, has development potential, or is transferred with other rights. - The supplied statutory material does not record a currency date, so the current wording and any relevant regulations should be checked before relying on this page. 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 when a connected company buys property at market value
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