Land Transaction Tax when services form part of the price
Services as part of the price
For Welsh LTT, a service given in return for land can count even where little or no cash changes hands.
- Use the open-market value
- Include VAT where applicable
- Check whether the promise is work instead
Scroll down for the full analysis.
Read the original guidance here:
Land Transaction Tax when services form part of the price
If you get land in return for doing a service, that service can increase the amount used for Welsh Land Transaction Tax (LTT). Its value is the open-market price at the transaction’s effective date. You include VAT when it would apply.
What this rule is about
A land deal can involve more than cash. You might promise management, advice, maintenance or another service as part of the bargain. That promise has a value. For LTT, it may count as part of what you give for the land.
What the official source says
The legislation values services at the amount someone would have had to pay for them on the open market on the effective date. This is the date set by the wider LTT rules for the transaction.
- The service may make up all of the price.
- It may make up only part of the price.
- VAT is included if it would be chargeable.
- Building, repair and improvement works have separate rules.
- Special rules can apply to certain public or educational body arrangements.
What this means in practice
Describing something as a “free service” does not settle the tax position. If a service forms part of the bargain for the land, even where the parties call it free and no separate cash payment changes hands, you may still include its market value. Cash is not decisive.
- Read the agreement for promises made by each side.
- Keep quotes or other evidence of the normal price.
- Check whether VAT would apply to that price.
How to analyse it
Begin with the bargain itself: what do you give to obtain the land?
- Identify each service promised as part of the deal.
- Separate services from construction, repair or improvement works.
- Find the open-market price on the effective date.
- Add VAT where it would be payable.
- Check whether the special public or educational body rules may apply.
Example
Ravi buys land and agrees to provide a service for the seller. The open-market charge for that service, including any VAT that would apply, is £12,000. That £12,000 forms part of the amount used to work out LTT. It matters even when Ravi makes no separate cash payment.
Why this can be difficult in practice
You often need to decide what the promise really is and what it is worth. The service might be unusual, bundled with other work, or lack an obvious listed price. Contract labels are not decisive.
- A service can be confused with building work.
- A low stated value may not reflect the market price.
- VAT treatment can change the amount counted.
- Public or educational body arrangements need separate checking.
Key takeaways
- Services can form part of the price for land.
- Use their open-market value on the effective date.
- Include VAT where it would apply.
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 for amounts paid for land
- LTTA 2017 Schedule 4 para 11 — separate rules for building and improvement works
- LTTA 2017 Schedule 4 para 12 — valuing services given as payment for land
- LTTA 2017 Schedule 4 para 18 — special arrangements involving public or educational bodies
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 an obligation is a service or work can depend on the facts.
- Open-market value may need evidence where there is no normal market price.
- The special public or educational body rules apply only where their detailed conditions are met.
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 agreement showing what each party must provide.
- Any quote, invoice or market evidence for the service value.
- Details of any VAT that would apply.
- Details of any public or educational body involved in the arrangement.
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 Land Transaction Tax when services form part of the price [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 for amounts paid for land https://www.legislation.gov.uk/anaw/2017/1/section/18 - LTTA 2017 Schedule 4 para 11 - separate rules for building and improvement works https://www.legislation.gov.uk/anaw/2017/1/schedule/4/paragraph/11 - LTTA 2017 Schedule 4 para 12 - valuing services given as payment for land https://www.legislation.gov.uk/anaw/2017/1/schedule/4/paragraph/12 - LTTA 2017 Schedule 4 para 18 - special arrangements involving public or educational bodies https://www.legislation.gov.uk/anaw/2017/1/schedule/4/paragraph/18 Guidance page from the Welsh Revenue Authority on this topic (guidance, not law): https://www.gov.wales/chargeable-consideration-technical-guidance#5150 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 an obligation is a service or work can depend on the facts. - Open-market value may need evidence where there is no normal market price. - The special public or educational body rules apply only where their detailed conditions are met. 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: Land Transaction Tax when services form part of the price
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