Group relief withdrawn: how the LTT amount is worked out
Group relief withdrawal and LTT
When group relief is withdrawn, LTT is worked out by revisiting the original transfer. The calculation uses original-date market value and may be reduced where only part of the transferred interest remains.
- Check whether a withdrawal exception applies.
- Identify interests still held by the buyer and relevant associated companies.
- Keep evidence of the original transfer and valuations.
Scroll down for the full analysis.
Read the original guidance here:
Group relief withdrawn: how the LTT amount is worked out
If group relief later falls away, the company may have to pay Land Transaction Tax (LTT) on the earlier transfer. LTT replaced stamp duty land tax in Wales in 2018.
The key question is not simply what the land is worth now. It is what interest remains when the group link ends.
What this rule is about
Group relief can remove LTT. It applies when companies in the same group transfer land between themselves.
That relief does not always last. If the law withdraws it, it looks back at the original transfer and works out the tax that would have been due.
This can matter a great deal after a company sale, reorganisation or group break-up. The original transfer may have involved valuable land, yet the company may no longer hold all of it when the later event happens.
What the official source says
The Welsh Revenue Authority’s guidance explains the amount due. It covers withdrawals of group relief.
The starting point is the LTT that would have applied to the original transfer if no group relief claim had been made.
- Use the market value of the land interest transferred on the original effective date.
- Include rent if the original transfer granted a lease at a rent.
- On withdrawal, make a complete inventory of interests still held, whether by the buyer itself or by any relevant associated company.
- Where the same interest remains, calculate tax in full on the original transfer.
- For a different or smaller interest, calculate an appropriate proportion.
Put simply, tax can be charged on all or part of the earlier transfer. It does not automatically use the land’s value at the later withdrawal date.
What this means in practice
A partial disposal will not necessarily resolve the issue. Although a partial holding can reduce the amount due, an LTT charge may remain.
The relevant interests determine the result. Their values are compared with the value of the original interest.
What does “appropriate proportion” mean? The guidance treats it as a fraction based on market values: the value of interests still held, compared with the value of the interest originally transferred.
- Keep the original transfer documents and the valuation used for the earlier date.
- As the group changes, create a full map showing every part of the land and every interest that is still held.
- Check whether another company leaving with the buyer counts as a relevant associated company.
- Separate the value of land still held from land or rights that have gone.
- Check the lease terms where the original transfer involved rent.
How to analyse it
Start with the withdrawal event. Then work backwards.
Establish first whether relief has been withdrawn. Only then calculate any proportion. Check that point first.
- Was the original transfer one for which group relief was available and claimed?
- Has an event occurred that withdraws that relief?
- Does an exception prevent withdrawal in this case?
- What land interest did the buyer receive on the original effective date?
- At the event, what interest remains with the buyer or a relevant associated company?
- What were the market values of those interests on the original effective date?
- Is any lease rent from the original transfer also part of the calculation?
The three-year rule can be important here. Group relief may be withdrawn when the buyer leaves the seller’s group within three years of the original effective date, or under arrangements made within that period.
Example
This example illustrates the proportion only; it does not calculate the final tax. A company received land worth £1,000,000 on the original effective date and claimed group relief.
When the group link later ends, determine whether it and any relevant associated companies still hold an interest arising from that original transfer, whatever form that interest now takes. That interest is worth £400,000.
The appropriate proportion is 40%: £400,000 divided by £1,000,000. The LTT due is therefore 40% of the tax that would have applied to the original transfer without group relief, using the statutory calculation.
Why this can be difficult in practice
This is where records and valuations matter. Land may have been split, developed, leased, granted away or put into another group company.
A label in an internal group chart will not settle what interest remains.
You might think the later market value decides the bill. It does not.
Original-date market value starts the statutory calculation. The later position helps determine the proportion.
- A partial sale can leave an interest that still links back to the original transfer.
- A lease can add rent to the calculation as well as the land value.
- Working out which companies are relevant associated companies may be fact-sensitive.
- Exceptions can matter, especially where the seller rather than the buyer leaves the group.
Key takeaways
- Withdrawal can revive LTT on an earlier group transfer.
- The calculation starts with original-date market value, not today’s value.
- Holding only part of the original interest can produce a proportionate LTT charge.
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 Schedule 16 para 2 — group relief for companies in the same group
- LTTA 2017 Schedule 16 para 8 — when group relief is withdrawn and tax recalculated
- LTTA 2017 Schedule 16 para 9 — cases where group relief is not withdrawn
- LTTA 2017 Schedule 16 para 10 — exception where the seller leaves the group
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 legislation describes an appropriate proportion by reference to the original transfer and interests held at the relevant time. Applying that test to split, altered or derived land interests can require a careful valuation.
- The supplied statutory bundle has no currency notice. Its status for transactions or changes in law after its recorded currency cannot be confirmed from the supplied materials.
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 documents for the original group transfer and its effective date.
- A valuation of the interest transferred at that date.
- Details and valuations of interests still held when the group relationship ends.
- The group structure immediately before and after the withdrawal event.
- Lease terms and rent details where the original transfer granted a lease.
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 Group relief withdrawn: how the LTT amount is worked out [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 Schedule 16 para 2 - group relief for companies in the same group https://www.legislation.gov.uk/anaw/2017/1/schedule/16/paragraph/2 - LTTA 2017 Schedule 16 para 8 - when group relief is withdrawn and tax recalculated https://www.legislation.gov.uk/anaw/2017/1/schedule/16/paragraph/8 - LTTA 2017 Schedule 16 para 9 - cases where group relief is not withdrawn https://www.legislation.gov.uk/anaw/2017/1/schedule/16/paragraph/9 - LTTA 2017 Schedule 16 para 10 - exception where the seller leaves the group https://www.legislation.gov.uk/anaw/2017/1/schedule/16/paragraph/10 Guidance page from the Welsh Revenue Authority on this topic (guidance, not law): https://www.gov.wales/land-transaction-tax-group-relief-technical-guidance 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 legislation describes an appropriate proportion by reference to the original transfer and interests held at the relevant time. Applying that test to split, altered or derived land interests can require a careful valuation. - The supplied statutory bundle has no currency notice. Its status for transactions or changes in law after its recorded currency cannot be confirmed from the supplied materials. 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 4 September 2026
Useful article? You may find it helpful to read the original guidance here: Group relief withdrawn: how the LTT amount is worked out
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