Linked Land Transaction Tax: the calculation for a second purchase
Linked LTT purchases
For linked purchases, Land Transaction Tax is worked out on the combined price and then divided between the deals.
- The second purchase can increase tax on the first.
- The official example splits £18,500 between £100,000 and £500,000 purchases.
- A later deal may require a further return for the earlier purchase.
Scroll down for the full analysis.
Read the original guidance here:
Linked Land Transaction Tax: the calculation for a second purchase
Linked Land Transaction Tax: the calculation for a second purchase
A second linked property purchase can alter the stamp duty bill for the first one. For Land Transaction Tax (LTT), add both prices, calculate tax on the total, and then split that tax between the purchases.
This can create an additional bill for the first purchase. An official example demonstrates how.
What this rule is about
Linked purchases are deals that form one scheme, arrangement or series between the same buyer and seller, or people connected with them. The rule stops buyers from treating linked deals as though each part stood alone for tax.
The connection between the deals is what matters. Purchasing on different days does not, by itself, stop the rule from applying.
What the official source says
The Welsh Government uses A Ltd to illustrate two linked purchases in its technical guidance. A Ltd’s first purchase costs £100,000. Its second costs £500,000.
The guidance puts them together as a £600,000 total. It states that the LTT on that total is £18,500, but does not show the tax bands used to reach that figure.
- First, add the prices: £100,000 plus £500,000 equals £600,000.
- Next, work out the tax on £600,000: the example gives £18,500.
- For the second purchase, use £500,000 divided by £600,000: five-sixths.
- Five-sixths of £18,500 is £15,416.67.
- For the first purchase, use one-sixth of the total.
- One-sixth of £18,500 is £3,083.33.
What this means in practice
You do not simply calculate LTT separately on the later property. When a later purchase links to an earlier one, you combine both prices, calculate LTT on the total, and apportion it between the purchases, which can increase the tax due on the first deal. That can change the first bill.
For transaction 2, A Ltd must send a return and pay £15,416.67 by 31 December 2020. For transaction 1, it must send a further return and pay £3,083.33 by 31 December 2021.
- Review the first purchase when you agree a later deal.
- Check whether the same parties, or connected people, took part.
- Include the earlier purchase when working out the combined total.
- Expect a further return if the later deal creates extra tax on the earlier one.
How to analyse it
Begin with the facts rather than the contract labels. Buyers must use those facts, rather than separate descriptions, to decide whether two purchases are linked.
- List every property purchase that may form part of the wider deal.
- Check who bought and sold each property.
- Ask whether the purchases form one arrangement or series.
- Add the amounts you paid for purchases that are linked.
- Work out the tax on that combined amount using the applicable bands.
- Divide that tax between the purchases by their share of the total price.
- Check whether the later purchase means you need another return for an earlier one.
Example
Here is the official illustration in plain figures. A Ltd first buys property worth £100,000, then makes a linked £500,000 purchase. Together, they total £600,000 and the example’s total LTT is £18,500. The £500,000 purchase takes five-sixths, so its tax is £15,416.67. The first purchase takes one-sixth, so its tax is £3,083.33.
Why this can be difficult in practice
In practice, most people focus only on the property they are about to buy. Focusing only on that property can prove expensive when another purchase forms part of the same overall arrangement and changes the answer. That is the trap.
This official example is also historic. It gives a result, not the rates behind it, so you cannot use £18,500 as a figure for a current £600,000 purchase.
- A later purchase may change the tax result for an earlier one.
- Connected buyers or sellers can matter as much as named parties.
- The source does not provide all the dates behind its example.
- Check current LTT bands separately.
Key takeaways
- Calculate tax on linked purchases using their combined price.
- The tax is then split by each purchase’s share of that price.
- A later linked purchase can trigger a further return for the first one.
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 8 — when land purchases count as linked transactions
- LTTA 2017 section 27 — calculating tax using the relevant tax bands
- LTTA 2017 section 28 — calculating tax for each linked purchase
- LTTA 2017 section 44 — making a return for a notifiable purchase
- LTTA 2017 section 51 — further return after a later linked purchase
- LTTA 2017 section 57 — paying tax by the return deadline
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 supplied source does not give the effective dates of the two purchases, only the filing and payment dates.
- The example cannot establish the tax bands or rates that apply to a purchase today.
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 contracts and completion details for both purchases.
- The prices paid for every purchase said to be linked.
- The identity of each buyer and seller, including any connected persons.
- The effective date of each purchase and copies of earlier LTT returns.
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 Linked Land Transaction Tax: the calculation for a second purchase [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 8 - when land purchases count as linked transactions https://www.legislation.gov.uk/anaw/2017/1/section/8 - LTTA 2017 section 27 - calculating tax using the relevant tax bands https://www.legislation.gov.uk/anaw/2017/1/section/27 - LTTA 2017 section 28 - calculating tax for each linked purchase https://www.legislation.gov.uk/anaw/2017/1/section/28 - LTTA 2017 section 44 - making a return for a notifiable purchase https://www.legislation.gov.uk/anaw/2017/1/section/44 - LTTA 2017 section 51 - further return after a later linked purchase https://www.legislation.gov.uk/anaw/2017/1/section/51 - LTTA 2017 section 57 - paying tax by the return deadline https://www.legislation.gov.uk/anaw/2017/1/section/57 Guidance page from the Welsh Revenue Authority on this topic (guidance, not law): https://www.gov.wales/calculation-land-transaction-tax-payable-technical-guidance#6944 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 supplied source does not give the effective dates of the two purchases, only the filing and payment dates. - The example cannot establish the tax bands or rates that apply to a purchase today. 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: Linked Land Transaction Tax: the calculation for a second purchase
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