Connected persons for Welsh Land Transaction Tax: the family and control rules
Connected persons for Welsh LTT
Two parties may be connected through family ties or through direct or indirect company control. This can affect how another LTT rule applies to their property deal.
- The Welsh LTT Act uses the Corporation Tax Act definition.
- Company names alone do not settle the issue.
- Ownership, voting rights and control documents may be needed.
Scroll down for the full analysis.
Read the original guidance here:
Connected persons for Welsh Land Transaction Tax: the family and control rules
Connected persons for Welsh Land Transaction Tax
A family link or company control may make two people “connected” for Welsh Land Transaction Tax. That status may affect how another LTT rule applies to a property deal. Knowing or negotiating together is insufficient.
What this rule is about
Welsh Land Transaction Tax, Wales’s version of stamp duty, applies to land and property deals. Another LTT rule may require a decision on whether two people are connected. Some LTT rules ask whether the buyer and another person are connected.
The rule requires you to look beyond the name on a contract. Relatives, a company you control, or companies linked through a wider group may all be involved in a deal. These links may matter even when they are not obvious at first glance.
When an LTT rule raises the connected-person question, section 74 of the Welsh LTT Act directs you to the connected-person rules in the Corporation Tax Act 2010 instead of providing a standalone Welsh test. This is not a separate Welsh definition created solely for property tax.
What the official source says
The Welsh Revenue Authority provides a broad outline of the test. For an individual, a family relationship may create a connection. For companies, control is the central idea: who can direct a company’s affairs.
- Family links can include spouses, siblings, ancestors and descendants.
- A company can be connected with another company where one controls the other.
- An individual can be connected with a company that they control.
- Control can be direct, such as a person holding rights in a company.
- Control can also be indirect, through another person or company.
- The detailed definition comes from Corporation Tax Act 2010 section 1122.
- Other provisions explain family links, associates, control and rights that count towards control.
- Section 74 says that some specific LTT rules make their own adjustments to the general definition.
The official page gives an outline of the rule. Where the facts are complicated, the statutory wording determines the answer.
What this means in practice
Do not assume that two parties are independent merely because they use separate solicitors, agree a market price, or have different company names. Those facts may matter elsewhere, but they do not resolve the connected-person question.
Likewise, a family connection does not turn simply on who lives together. The legal definition identifies the relevant relationships. In company cases, examine carefully who truly has the power to direct decisions.
- Check family links between the people involved in the deal.
- Check whether either side owns or controls a company involved.
- Trace ownership through parent companies and holding companies.
- Look at voting rights as well as shares.
- Check agreements that give someone power over company decisions.
- Do not stop at the immediate buyer or seller.
If your conveyancer says the parties are connected and you are unsure why, ask for the relationship or control chain in writing. A simple diagram often reveals the real issue.
How to analyse it
Begin with the people and companies involved. Then identify any family link or route of control between them. A route of control may pass through another company before reaching the company in question, so you must examine more than a direct shareholding. Check every link.
- Who are the buyer, seller and any companies involved?
- Is there a relevant family relationship between any individuals?
- Who holds shares and voting rights in each company?
- Who can appoint directors or otherwise direct company decisions?
- Does that power exist through another company or person?
- Are rights held by others treated as belonging to someone for the control test?
- Does the particular LTT rule being used change the general connected-person rule?
What actually determines the answer? Usually, the full chain of relationships and rights. Labels such as “minority owner” or “separate business” may not provide enough information.
Example
Imagine that Asha owns and controls Harbour Ltd. Harbour Ltd controls Valley Homes Ltd. If Asha buys land from Valley Homes Ltd, the connection is not limited to a direct holding between Asha and Valley Homes. You must also consider the control route through Harbour Ltd.
Now change the facts. If Asha has no family link, no control rights and no indirect route to Valley Homes Ltd, the broad reason for treating her as connected may fall away. The exact answer still depends on the statutory tests and the documents behind the structure.
Why this can be difficult in practice
Family cases may appear simple. Company cases often do not. Control may depend on who truly has the power to direct a company’s affairs through voting rights, agreements, or other rights, rather than simply on the company name shown on a form. Names alone may mislead.
You may think that a small shareholding means there can be no control. That is not always safe. Voting rights, agreements and rights attributed under the control rules may all require checking.
- Indirect ownership is easy to miss in a group structure.
- Voting rights may differ from the percentage of shares held.
- Shareholder agreements may give rights that registers do not show.
- Family relationships may matter even where relatives have no role in the sale.
- A specific LTT rule may alter how the general definition works.
- HMRC guidance can assist, but it does not replace the legislation.
This is where people go wrong: they consider only the two names on the contract. The law may require a wider view.
Key takeaways
- For Welsh LTT, connected persons are defined by Corporation Tax Act rules.
- Family relationships and company control can both create a connection.
- Check indirect control and the specific LTT rule in question.
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 74 — applies the corporation tax connected persons definition
- an Act of 2010 we do not have an identifier for section 112 — sets the main test for connected persons (no link: an Act of 2010 we do not have an identifier for)
- an Act of 2010 we do not have an identifier for section 112 — gives supplementary rules for connected persons (no link: an Act of 2010 we do not have an identifier for)
- an Act of 2010 we do not have an identifier for section 448 — defines an associate for the control rules (no link: an Act of 2010 we do not have an identifier for)
- an Act of 2010 we do not have an identifier for section 450 — explains when a person controls a company (no link: an Act of 2010 we do not have an identifier for)
- an Act of 2010 we do not have an identifier for section 451 — sets out rights that count towards control (no link: an Act of 2010 we do not have an identifier for)
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 answer can depend on the full ownership, voting and control structure, including rights held through other people or companies.
- The supplied source does not give a complete worked test for every family, company or ownership arrangement.
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.
- A family relationship diagram where individuals are involved.
- Company registers, shareholdings and voting rights.
- Articles of association, shareholder agreements and other rights to direct company decisions.
- A chart showing any companies or people between the two parties.
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 Connected persons for Welsh Land Transaction Tax: the family and control rules [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 74 - applies the corporation tax connected persons definition https://www.legislation.gov.uk/anaw/2017/1/section/74 - an Act of 2010 we do not have an identifier for section 112 - sets the main test for connected persons - an Act of 2010 we do not have an identifier for section 112 - gives supplementary rules for connected persons - an Act of 2010 we do not have an identifier for section 448 - defines an associate for the control rules - an Act of 2010 we do not have an identifier for section 450 - explains when a person controls a company - an Act of 2010 we do not have an identifier for section 451 - sets out rights that count towards control Guidance page from the Welsh Revenue Authority on this topic (guidance, not law): https://www.gov.wales/land-transaction-tax-interpretation-provisions-technical-guidance#6424 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 answer can depend on the full ownership, voting and control structure, including rights held through other people or companies. - The supplied source does not give a complete worked test for every family, company or ownership arrangement. 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: Connected persons for Welsh Land Transaction Tax: the family and control rules
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