LTT when you pay for trustees to pass you land
Trust appointment payments and LTT
A payment linked to trustees using a power to pass you an interest in land may count as payment for that interest for LTT purposes.
- Look at the trust terms and trustees’ decision.
- Trace payments made to trustees or others.
- Check the link between the payment and receiving the land interest.
Scroll down for the full analysis.
Read the original guidance here:
LTT when you pay for trustees to pass you land
Paying trustees to use a trust power in your favour can matter for Welsh Land Transaction Tax, or LTT. It may mean that the payment counts as part of what you gave for the land. In everyday terms, this is a stamp duty point about a payment that may not look like a normal property price.
What this rule is about
A trust may hold land for a group of possible beneficiaries. Its trustees may have a power to choose who receives an interest in that land. They may also have discretion about how to use trust property.
Sometimes, a person pays for trustees to use that power in their favour. Payment might go to the trustees. It might go to somebody else connected with the arrangement.
That is the point of this rule: do not ignore a payment simply because trustees transferred the land through a trust rather than by an ordinary sale.
What the official source says
The official guidance says that, where someone gets an interest in land because of a power of appointment or trustees’ discretion, it treats a payment by the person who benefits as payment for getting that interest.
- Someone must obtain an interest in land.
- Trustees must use a power of appointment to pass the interest.
- Alternatively, trustees must use their discretion to pass it.
- A payment linked to that outcome counts as a payment for the land interest.
Official guidance gives the example of a payment to trustees in return for their use of a power so that land passes out of the trust to that person.
Legislation uses slightly different words. It treats consideration given for the person benefiting to become an object of the power or discretion as consideration for the interest they obtain. An object of a power is, simply, a person whom the trustees may choose to benefit.
What this means in practice
You cannot assume that there is no relevant payment because there is no sale contract with a stated price. What matters is the real link between the payment and the trustees giving you the land interest.
- A payment to trustees may count if it is part of the arrangement.
- A payment to another beneficiary may also need checking.
- Putting a name on the payment does not settle the issue.
- The amount may be relevant even if the trust transfer looks like a gift.
This rule does not mean that every trust appointment creates an LTT bill. Instead, it explains how to treat a relevant payment if the other LTT rules apply.
How to analyse it
Start with the documents and the money trail. The key question is not only who received money. Ask why it was paid and what the trustees did in return.
- Identify the land interest that passed from the trust.
- Read the trust terms to find the relevant power or discretion.
- Check the trustees’ decision that passed the interest.
- List every payment connected with the arrangement.
- Check who gave each payment and who received it.
- Compare the timing and stated purpose of the payment with the trustees’ decision.
- Decide whether the person gave the payment to benefit from the power or discretion.
This is the part people can miss. A payment made outside the transfer deed may still have a close enough link to the land interest to matter.
Example
Illustration: A trust owns land. Asha pays the trustees £25,000 under an arrangement under which they use their discretion to transfer an interest in that land to her. Official guidance treats £25,000 as payment for obtaining the interest. This rule does not set an LTT rate, and this example does not decide whether tax is due overall.
Now change one fact. If Asha makes a separate payment that has no link to becoming eligible for, or receiving, the land interest, the connection required by this rule may be absent. The documents and the real purpose of the payment matter.
Why this can be difficult in practice
Trust arrangements often involve several people, several documents and payments made for more than one reason. That can make the true reason for a payment hard to pin down.
- A payment may be made to a beneficiary rather than the trustees.
- One payment may cover both land-related and non-land matters.
- The paperwork may describe a payment differently from the wider arrangement.
- The guidance and the statutory wording are not identical on who gives the relevant payment.
That last point matters. The guidance focuses on payment by the person who benefits. The statute refers to payment given for that person becoming an object of the power or discretion. Where another person funds the arrangement, the answer needs careful review.
Key takeaways
- A trust transfer can involve a relevant property payment even without an ordinary sale.
- Check the reason for every payment, not just where the money went.
- The current statutory wording should be checked alongside the official guidance.
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 — introduces the rules for taxable payment amounts
- LTTA 2017 Schedule 4 para 1 — defines payments that count for a land transaction
- LTTA 2017 Schedule 8 para 5 — treats certain trust appointment payments as property payments
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 describes consideration given by the person who benefits from the exercise. The current statutory wording instead refers to consideration given for that person becoming an object of the power or discretion. That difference may matter where somebody else provides the payment.
- The supplied skill bundle does not contain the requested currency notice, so its confirmed currency date cannot be checked.
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 trust deed and any document creating the appointment power or trustees’ discretion.
- The trustees’ written decision or deed showing how the land interest passed.
- Payment records, agreements and correspondence explaining why each payment was made.
- Evidence identifying who made the payment and who was intended to benefit.
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 you pay for trustees to pass you land [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 - introduces the rules for taxable payment amounts https://www.legislation.gov.uk/anaw/2017/1/section/18 - LTTA 2017 Schedule 4 para 1 - defines payments that count for a land transaction https://www.legislation.gov.uk/anaw/2017/1/schedule/4/paragraph/1 - LTTA 2017 Schedule 8 para 5 - treats certain trust appointment payments as property payments https://www.legislation.gov.uk/anaw/2017/1/schedule/8/paragraph/5 Guidance page from the Welsh Revenue Authority on this topic (guidance, not law): https://www.gov.wales/land-transaction-tax-trusts-technical-guidance#6006 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 describes consideration given by the person who benefits from the exercise. The current statutory wording instead refers to consideration given for that person becoming an object of the power or discretion. That difference may matter where somebody else provides the payment. - The supplied skill bundle does not contain the requested currency notice, so its confirmed currency date cannot be checked. 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 you pay for trustees to pass you land
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