Linked LTT purchases when tax rates change: the Transaction 3 example
In brief
Linked LTT purchases can require earlier tax bills to be recalculated when a later purchase takes place. The WRA’s Transaction 3 example also shows how a change in tax rates can affect the calculations.
- Add all linked purchase amounts together.
- Give each purchase its share of tax using its fraction of the total.
- Check whether earlier returns need to be made again and topped up.
Scroll down for the full analysis.
Read the original guidance here:
Linked LTT purchases when tax rates change: the Transaction 3 example
Linked LTT purchases when tax rates change
When several property purchases are linked, a later purchase can alter the Land Transaction Tax bill for earlier ones. This official Welsh example explains why. People often call it stamp duty, but in Wales the tax is LTT.
What this rule is about
Linked purchases are not taxed as if each stands alone. Instead, you add the amounts paid for all linked purchases. Use that combined total to work out the tax.
A change in LTT rates between purchases can make this matter even more. New rates may apply to the third purchase. Earlier purchases may require a fresh calculation using the old rates that applied to them.
It may sound like a small maths point. Yet it can mean extra tax and more returns.
What the official source says
The Welsh Revenue Authority’s Transaction 3 example covers three linked purchases. When the official example brings together all three linked purchases for the calculation required at this stage, their combined value is £1,300,000: £100,000 for transaction 1, £500,000 for transaction 2, and £700,000 for transaction 3. Those are the figures used.
- For transaction 3, the example applies the new rates and bands to £1,300,000.
- That produces total tax of £55,750.
- Transaction 3 accounts for £700,000 out of £1,300,000, or 7/13.
- Its share of the tax is therefore £30,019.23: £55,750 multiplied by 7/13.
- For transactions 1 and 2, once it has treated all three purchases as linked and combined their values, the example recalculates the £1,300,000 total using the old rates and bands. The old rates are used.
- Under those old rates, total tax is £56,500.
For linked purchases, the law provides this three-step method. Work out the tax on the combined total. Divide the amount for the purchase by that total. Then multiply the two results.
Guidance, rather than legislation, is what the official example provides. Its figures are historical illustrations. They do not give the LTT rates that apply to a purchase now.
What this means in practice
In practice, you cannot safely look only at the latest property’s price when that purchase may be linked to earlier purchases and the whole group affects the calculation. Check the whole group. If it is linked to earlier purchases, you need the price of every purchase in the group.
In the example, transaction 3 causes the earlier tax bills to rise. Transaction 1 has a 1/13 share. Its recalculated tax is £4,346.15. Transaction 2 has a 5/13 share. Its recalculated tax is £21,730.77.
- The company that bought transaction 3 must make a return for that purchase.
- The source says tax of £30,019.23 is due for transaction 3.
- The source tells the company that transaction 1 requires a further return.
- Its earlier payment was £3,083.33, leaving £1,262.82 to pay.
- The source says a further return is also needed for transaction 2.
- Its earlier payment was £15,416.67, leaving £6,314.10 to pay.
For these historical returns, the source gives 31 January 2021 as the filing and payment date. Do not treat that as a general deadline. Under the Act, a return prompted by a later linked purchase is normally due within 30 days beginning with the day after that later purchase’s effective date.
How to analyse it
Begin with the link, not the calculation. The rules treat purchases as linked when they form one scheme, arrangement or series between the same buyer and seller, or people connected with them.
- List every related land purchase, including the date and amount paid.
- Check whether they form one arrangement or series.
- Identify the effective date for each purchase.
- Check the LTT rates and bands that applied on each relevant date.
- Add the amounts paid for all linked purchases, excluding rent for this calculation.
- Calculate the tax on that combined figure.
- Give each purchase its fraction of the combined figure.
- Compare the revised result with tax already paid on earlier returns.
- Make any further return required because the later purchase creates extra tax.
What decides the result? Usually, the answer turns on whether the purchases are truly linked and which rates applied on each date. The arithmetic comes after that.
Example
Use the figures in the official example. Transaction 3 costs £700,000 and all three linked purchases total £1,300,000. On the total, the new-rate calculation is £55,750. Because £700,000 is 7/13 of the total, and because the example assigns each purchase its fraction of the tax on all linked purchases, tax for transaction 3 is £55,750 × 7/13 = £30,019.23. That is its tax.
For the first two purchases, the example instead uses the old rates. Tax on £1,300,000 is £56,500. Transaction 1 receives 1/13, giving £4,346.15. Transaction 2 receives 5/13, giving £21,730.77.
Why this can be difficult in practice
Often, the fraction is not the hard part. Spotting the connection between deals can be difficult, especially where companies or connected people are involved.
- Buying on different dates does not by itself mean the purchases are separate.
- Using separate contracts does not by itself settle the question.
- New rates for a later purchase do not automatically mean new rates apply to earlier purchases.
- Do not use the historical figures in this example for a current purchase.
- Keep the earlier returns and payment records, because, when a later linked purchase changes the calculation, the extra amount is the revised tax less what was already paid. Keep them available.
This can also be easy to miss where the third deal completes much later. By then, an earlier return may feel finished. A later linked purchase can reopen the tax position.
Key takeaways
- Linked purchases are calculated using their combined value.
- A later purchase can create extra LTT on an earlier one.
- Check the rates for each relevant date and any further return deadline.
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 24 — setting ltt tax bands and rates
- LTTA 2017 section 27 — calculating tax for a single unlinked purchase
- LTTA 2017 section 28 — calculating tax across linked land purchases
- LTTA 2017 section 44 — making a land transaction tax return
- LTTA 2017 section 51 — further returns after a later linked purchase
- LTTA 2017 section 57 — paying tax shown on a return
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.
- Welsh Revenue Authority technical guidance, LTTA/3030 Transaction 3
Where this is not settled
- The supplied extract does not give the dates or full facts of transactions 1 and 2, so it cannot show why each earlier purchase used the old rates.
- The supplied material does not state the current LTT rates and bands. They must be checked against the regulations that apply on the effective date.
- A currency notice requested in the brief was not present in the mounted skill files, so the currency date of the statutory bundle could not be verified.
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.
- Contracts and completion dates for every purchase in the series.
- The names of each buyer and seller, and details of any connection between them.
- A record of the amounts paid for each purchase.
- The LTT rates and bands in force on each relevant effective date.
- Earlier LTT returns and proof of tax already paid.
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 LTT purchases when tax rates change: the Transaction 3 example [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 24 - setting ltt tax bands and rates https://www.legislation.gov.uk/anaw/2017/1/section/24 - LTTA 2017 section 27 - calculating tax for a single unlinked purchase https://www.legislation.gov.uk/anaw/2017/1/section/27 - LTTA 2017 section 28 - calculating tax across linked land purchases https://www.legislation.gov.uk/anaw/2017/1/section/28 - LTTA 2017 section 44 - making a land transaction tax return https://www.legislation.gov.uk/anaw/2017/1/section/44 - LTTA 2017 section 51 - further returns after a later linked purchase https://www.legislation.gov.uk/anaw/2017/1/section/51 - LTTA 2017 section 57 - paying tax shown on a return 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 extract does not give the dates or full facts of transactions 1 and 2, so it cannot show why each earlier purchase used the old rates. - The supplied material does not state the current LTT rates and bands. They must be checked against the regulations that apply on the effective date. - A currency notice requested in the brief was not present in the mounted skill files, so the currency date of the statutory bundle could not be verified. 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 LTT purchases when tax rates change: the Transaction 3 example
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