Partnership property transferred before 20 October 2003: the LTT share rule
Historic partnership shares and LTT
When property that entered a partnership before 20 October 2003 later leaves it, LTT uses a special historic-share calculation.
- Start with the relevant income-profit share.
- Add only qualifying stamped increases.
- Subtract all later decreases, but never below zero.
Scroll down for the full analysis.
Read the original guidance here:
Partnership property transferred before 20 October 2003: the LTT share rule
Partnership property transferred before 20 October 2003: the LTT share rule
If land went into a partnership before 20 October 2003 and later comes out, a special historic rule may affect Land Transaction Tax in Wales. The key is not simply today’s profit split. You must trace the partner’s share from a set historic date.
What this rule is about
This is a narrow rule for property leaving a partnership. It forms part of a calculation that can reduce the value used for Land Transaction Tax, sometimes called stamp duty on property.
The rule considers a partner’s share of the partnership’s income profits. It does not simply ask who owned the land, or who paid for it.
Why such an old date? The law distinguishes between land that entered a partnership before 20 October 2003 and land that entered later, because the two groups must meet different tests. Their tests differ.
What the official source says
The official Welsh Government technical guidance sets out the historic rule in three stages. It applies where the relevant land became partnership property before 20 October 2003.
- Where the partner was already a partner on 19 October 2003, begin with that partner’s actual share of income profits on that date, rather than a later share.
- If they joined later, use their income-profit share when they became a partner.
- Add later increases in that share, but only if a document stamped with ad valorem stamp duty made the increase.
- Deduct every later decrease in the share.
- Include only changes occurring from the day after the starting date up to the day before the current transaction, and exclude any change outside that period.
- If the result would be below zero, use zero instead.
- If the person stopped being a partner before 19 October 2003, their attributed share is zero.
“Ad valorem” stamp duty means duty based on the value involved. This is old Stamp Duty. It is not the same tax as Stamp Duty Land Tax.
The historic rule applies to the land that is leaving the partnership. If partnership property gives rise to a new interest, the rule applies to the land from which that new interest arises.
What this means in practice
Do not assume that a current partnership agreement provides the answer. Although it may show the present split, the historic calculation can require much older agreements, accounts and stamped papers to establish the relevant position. That distinction matters.
It can change the result of the wider LTT calculation.
- Find out exactly when the land first became partnership property.
- Check whether that date was before 20 October 2003.
- Identify each person who was a partner at the relevant historic point.
- Use income-profit shares, rather than capital-account balances, as the starting measure.
- Keep proof that a later increase came from a properly stamped document.
- Record decreases even where there is no matching stamp document.
This calculation does not itself state how much LTT you must pay. It supplies one figure used in the wider calculation for property transferred out of a partnership.
How to analyse it
Work through the dates first. A later ownership change may distract from the real question: when did this particular land enter the partnership, before any later transfer or alteration of the partners’ interests? Start there.
- Confirm that the property is leaving the partnership, or that its property is creating an interest.
- Confirm the effective date when the land entered the partnership.
- If it was before 20 October 2003, identify the relevant partner and their starting date.
- Find their share of the income profits on that date.
- Before the current transfer, identify each increase and determine whether a document stamped with ad valorem stamp duty made it, since only those increases qualify.
- List each decrease in the same period.
- Add qualifying increases, subtract decreases and stop at zero.
- Then compare that result with the part of the property linked to that partner under the wider lower-proportions calculation.
Use the lower of those last two figures for that partner. Then add together the figures for all relevant partners.
Example
Here is a simple illustration. Mari was a partner on 19 October 2003 and had a 40% share of the partnership’s income profits. Later, her share rose by 10 percentage points through a transfer recorded in a document stamped with ad valorem stamp duty. Before the property left the partnership, her share fell by 15 percentage points.
Her historic attributed share is 35%: 40% plus 10%, less 15%. If the separate property calculation links only 30% of the property to Mari, the lower figure is 30%. This example does not calculate any LTT due.
Why this can be difficult in practice
The difficult part is usually evidence, not arithmetic. Partnerships may have changed their profit split informally, merged records, or lost documents from many years ago.
You might think every later increase counts. It does not. Under this historic rule, an increase needs a document that was stamped with ad valorem stamp duty.
- A current agreement may not prove the share held on the relevant historic date.
- A capital share and an income-profit share may be different.
- An informal change may be hard to match to a stamped transfer document.
- It may be unclear whether a person had left before 19 October 2003.
- The rule applies to the specific land interest involved, not automatically to all partnership assets.
- The post-20 October 2003 rule is different and should not be mixed with this one.
Key takeaways
- This special rule is for land that entered a partnership before 20 October 2003.
- Start with the income-profit share on 19 October 2003, or on joining later.
- Count later increases only if the required old stamp-duty evidence exists.
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 41 — brings partnership rules into the land tax system
- LTTA 2017 Schedule 7 para 21 — sets the tax basis for transfers from partnerships
- LTTA 2017 Schedule 7 para 22 — explains the lower-proportions calculation for a transfer out
- LTTA 2017 Schedule 7 para 23 — identifies owners relevant to a transfer from partnership
- LTTA 2017 Schedule 7 para 24 — defines a corresponding partner for this calculation
- LTTA 2017 Schedule 7 para 25 — works out property proportions linked to each partner
- LTTA 2017 Schedule 7 para 26 — calculates historic partnership shares before 20 October 2003
- LTTA 2017 Schedule 7 para 45 — defines a partner’s share of income profits
- LTTA 2017 Schedule 7 para 49 — defines when property leaves a partnership
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 old increase was made by a document stamped with ad valorem stamp duty will depend on the historic documents and stamp evidence.
- The supplied material does not give a complete tax calculation, tax rate or amount payable.
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 date on which the relevant land became partnership property.
- Partnership accounts or agreements showing income-profit shares.
- Dates of joining and leaving the partnership.
- Records of every later increase and decrease in a partner’s share.
- The original stamped instrument for each increase said to count.
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 Partnership property transferred before 20 October 2003: the LTT share rule [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 41 - brings partnership rules into the land tax system https://www.legislation.gov.uk/anaw/2017/1/section/41 - LTTA 2017 Schedule 7 para 21 - sets the tax basis for transfers from partnerships https://www.legislation.gov.uk/anaw/2017/1/schedule/7/paragraph/21 - LTTA 2017 Schedule 7 para 22 - explains the lower-proportions calculation for a transfer out https://www.legislation.gov.uk/anaw/2017/1/schedule/7/paragraph/22 - LTTA 2017 Schedule 7 para 23 - identifies owners relevant to a transfer from partnership https://www.legislation.gov.uk/anaw/2017/1/schedule/7/paragraph/23 - LTTA 2017 Schedule 7 para 24 - defines a corresponding partner for this calculation https://www.legislation.gov.uk/anaw/2017/1/schedule/7/paragraph/24 - LTTA 2017 Schedule 7 para 25 - works out property proportions linked to each partner https://www.legislation.gov.uk/anaw/2017/1/schedule/7/paragraph/25 - LTTA 2017 Schedule 7 para 26 - calculates historic partnership shares before 20 October 2003 https://www.legislation.gov.uk/anaw/2017/1/schedule/7/paragraph/26 - LTTA 2017 Schedule 7 para 45 - defines a partner's share of income profits https://www.legislation.gov.uk/anaw/2017/1/schedule/7/paragraph/45 - LTTA 2017 Schedule 7 para 49 - defines when property leaves a partnership https://www.legislation.gov.uk/anaw/2017/1/schedule/7/paragraph/49 Guidance page from the Welsh Revenue Authority on this topic (guidance, not law): https://www.gov.wales/partnerships-and-land-transaction-tax-technical-guidance#7204 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 old increase was made by a document stamped with ad valorem stamp duty will depend on the historic documents and stamp evidence. - The supplied material does not give a complete tax calculation, tax rate or amount payable. 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: Partnership property transferred before 20 October 2003: the LTT share rule
Search Land Tax Advice with Google
