LTT and informal first refusal arrangements for land sales
Informal arrangements can matter
WRA’s Example 2b says that a buyer’s informal first chance to buy land can link separate sales for LTT.
- No legally binding agreement is required in the example.
- The evidence of discussions and offers matters.
- Connected sales can change the LTT calculation.
Scroll down for the full analysis.
Read the original guidance here:
LTT and informal first refusal arrangements for land sales
For Land Transaction Tax (LTT), Wales’s stamp duty tax, an informal promise to offer land to one buyer first can link two sales. It need not be a signed or legally binding right. That link can require the buyer to work out LTT differently.
What this rule is about
Separate land sales raise one question: do they really form part of a single plan? If they do, the law treats them as linked transactions. This matters because the buyer works out LTT using the total paid across the connected sales.
Which facts decide it? The facts behind the sales, not just the paperwork.
What the official source says
WRA’s Example 2b describes Mr C, who discussed selling land before retirement. Ms D showed interest in other fields that he might sell. When he later decided to sell two fields, he approached her first.
- Ms D did not want the first field.
- Mr C then marketed that field and sold it to Y Ltd.
- Ms D bought the second field.
- WRA says the earlier sale to Ms D and her later purchase are linked.
- WRA says the arrangement arose from the earlier discussions.
- WRA says an arrangement does not have to be legally enforceable.
The legislation sets a broad test: it treats sales as connected when they form one scheme, arrangement or series between the same buyer and seller, or connected people. The example is WRA guidance that applies this test.
What this means in practice
Connection does not require every field to go to the same person. In the example, Ms D turned down one field and it went to Y Ltd. That did not end the arrangement affecting Mr C’s sales with Ms D.
For linked sales, the buyer does not work out LTT as if each sale stood alone. The law starts with the total paid for the connected sales. It then allocates the result between them.
- Keep records of early talks about a possible sale.
- Check who was offered each parcel of land first.
- Do not assume no signed agreement means no LTT link.
- Consider earlier and later sales together, not in isolation.
How to analyse it
Start with the story of the sales. A document can help, but it is not the only evidence that matters.
- Who discussed a possible sale, and when?
- Did the seller agree to offer land to one person first?
- Did that understanding lead to a later sale?
- Were the relevant sales between the same people?
- Did either party use a connected person?
- What was paid for each connected sale?
Example
Mr C has an earlier sale with Ms D. Before Mr C sells more land, he tells Ms D that she may have the first chance to buy further fields, and, after she rejects one, he sells it to Y Ltd while she buys another. WRA treats Mr C’s sales with Ms D as one arrangement. Because the source gives no prices, it does not provide a tax figure.
Why this can be difficult in practice
Many people assume that an informal understanding cannot count. Example 2b rejects that assumption. An informal understanding may matter when a seller made a clear promise or the parties shared an expectation, neither signed a contract, and the evidence still points to one connected plan. Signatures are not required.
That does not mean every expression of interest creates an arrangement. The key question is whether the evidence shows one connected plan for the sales.
- Casual talks can be hard to separate from a real arrangement.
- Missing emails or notes can make the facts harder to prove.
- A sale to somebody else does not automatically break the link.
- The order of discussions and sales may be important.
Key takeaways
- An informal first-refusal arrangement can affect LTT.
- A binding contract is not essential under WRA’s example.
- Check the full chain of discussions and sales.
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 — transactions forming one scheme or arrangement
- LTTA 2017 section 28 — calculation method for a group of linked sales
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 discussions amount to an arrangement depends on the evidence and the full facts.
- The source does not say how informal an understanding can be before it stops being an arrangement.
- The supplied skill files do not contain the requested currency notice, so the current status of the statutory text cannot be verified from them.
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.
- Emails, messages and notes recording discussions before the sales
- Details of which fields were offered to the buyer first
- Marketing records for land offered to other buyers
- Contracts, completion dates and amounts paid for each sale
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 and informal first refusal arrangements for land sales [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 - transactions forming one scheme or arrangement https://www.legislation.gov.uk/anaw/2017/1/section/8 - LTTA 2017 section 28 - calculation method for a group of linked sales https://www.legislation.gov.uk/anaw/2017/1/section/28 Guidance page from the Welsh Revenue Authority on this topic (guidance, not law): https://www.gov.wales/land-transactions#5054 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 discussions amount to an arrangement depends on the evidence and the full facts. - The source does not say how informal an understanding can be before it stops being an arrangement. - The supplied skill files do not contain the requested currency notice, so the current status of the statutory text cannot be verified from them. 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 and informal first refusal arrangements for land sales
Search Land Tax Advice with Google
