LTT when a buyer takes on the seller’s capital gains tax
Buyer-paid capital gains tax and LTT
In a qualifying non-independent transfer, capital gains tax taken on by the buyer may be left out of the amount used for LTT.
- No other value must be given for the land.
- Debt or a cash payment can change the result.
- The official guidance should be read alongside the legislation.
Scroll down for the full analysis.
Read the original guidance here:
LTT when a buyer takes on the seller’s capital gains tax
If you take on the seller’s capital gains tax in a Welsh land transfer, it may not add to your LTT bill. LTT is Wales’s property tax, rather than stamp duty. The answer changes if you give anything else for the land.
What this rule is about
This rule applies to transfers outside ordinary bargains between independent people. That can include a transfer between connected people. The seller may face capital gains tax although little or no money changes hands.
Ask one question: apart from the capital gains tax, what are you giving for the land? That distinction can change the LTT calculation.
What the official source says
The Welsh Revenue Authority leaves out the buyer’s capital gains tax responsibility where all the required facts apply and no other payment or value is given. Its guidance gives taking over debt as an example of other value.
- The transfer is not a normal independent-market deal.
- Alternatively, capital gains tax law treats connected people’s deal that way.
- The buyer’s capital gains tax relates to the matching sale of the land.
- The buyer becomes responsible for, agrees to pay, or pays that tax.
- No other money, debt, or value is given for the land.
Where there is another payment or item of value, the result reverses. LTT then includes the capital gains tax responsibility as well.
What this means in practice
LTT does not always treat taking on a tax bill as paying a price for the property. But this is a narrow result. One additional form of value can put the tax bill into the LTT calculation.
- Do not look only at the stated price in the transfer.
- Check whether you are taking over a mortgage or other debt.
- Check for a cash payment, however small.
- Check side letters and family arrangements.
- Keep the capital gains tax calculation with the property papers.
How to analyse it
Begin with the whole arrangement rather than just the main document, including any debt, promise, or side arrangement that may form part of what the buyer gives. Then test the value.
- Identify why the transfer is not an independent-market deal.
- Check whether the parties are connected under capital gains tax law.
- Match the capital gains tax to the seller’s land sale.
- List every item the buyer gives or promises.
- Separate the capital gains tax amount from those other items.
- Apply the special rule only if there is no other value.
Example
Illustration: Nia receives Welsh land from her father. She pays no cash and takes over no debt. Nia accepts responsibility for £20,000 of capital gains tax from his sale. On the official guidance, the Welsh Revenue Authority leaves out that £20,000 if the other conditions apply.
Change one fact: Nia also takes over £30,000 of debt secured on the land. There is now other value. The guidance includes the £20,000 tax responsibility too, alongside the debt.
Why this can be difficult in practice
People often assume a family transfer with no cash means there is nothing to consider for LTT. That is unsafe. Debt, promises, and linked arrangements can still matter for LTT when the transfer document says the price is nil and the wider arrangement supplies value. Look beyond it.
- A payment below market value is still another payment.
- Taking over debt can change the result.
- The tax must relate to the seller’s matching land sale.
- The guidance mentions an agreement to pay, while the statutory wording is narrower.
Key takeaways
- Buyer-paid capital gains tax can be left out for LTT.
- That normally requires no other value for the land.
- Cash payments and debt can bring the tax amount back in.
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 18 — schedule rules on amounts counted for ltt
- LTTA 2017 Schedule 4 para 1 — general rule for money or value given
- LTTA 2017 Schedule 4 para 8 — taking over debt as part of payment
- LTTA 2017 Schedule 4 para 16 — capital gains tax paid by the buyer
- an Act of 1992 we do not have an identifier for section 18 — connected-person deals treated at market value (no link: an Act of 1992 we do not have an identifier for)
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
- The official guidance refers to a buyer agreeing to pay capital gains tax. LTTA 2017 Schedule 4 paragraph 16 expressly refers to the buyer becoming liable or actually paying it, but does not separately mention an agreement alone.
- The supplied statutory library contains no currency notice or stated consolidation date. The current wording should be checked before relying on this point for a later 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 transfer document and any side agreement.
- Evidence of whether the parties are connected for capital gains tax purposes.
- The capital gains tax calculation and evidence that it relates to the seller’s matching land sale.
- Details of every cash payment, debt, service, or other value given by the buyer.
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 buyer takes on the seller’s capital gains tax [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 18 - schedule rules on amounts counted for ltt https://www.legislation.gov.uk/anaw/2017/1/section/18 - LTTA 2017 Schedule 4 para 1 - general rule for money or value given https://www.legislation.gov.uk/anaw/2017/1/schedule/4/paragraph/1 - LTTA 2017 Schedule 4 para 8 - taking over debt as part of payment https://www.legislation.gov.uk/anaw/2017/1/schedule/4/paragraph/8 - LTTA 2017 Schedule 4 para 16 - capital gains tax paid by the buyer https://www.legislation.gov.uk/anaw/2017/1/schedule/4/paragraph/16 - an Act of 1992 we do not have an identifier for section 18 - connected-person deals treated at market value Guidance page from the Welsh Revenue Authority on this topic (guidance, not law): https://www.gov.wales/chargeable-consideration-technical-guidance#5161 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 - The official guidance refers to a buyer agreeing to pay capital gains tax. LTTA 2017 Schedule 4 paragraph 16 expressly refers to the buyer becoming liable or actually paying it, but does not separately mention an agreement alone. - The supplied statutory library contains no currency notice or stated consolidation date. The current wording should be checked before relying on this point for a later 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: LTT when a buyer takes on the seller’s capital gains tax
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