Type B partnership transfers and Land Transaction Tax
Type B transfers at a glance
A Type B transfer can make a change in a property-investment partnership share subject to Land Transaction Tax.
- It is any covered transfer that is not Type A.
- Only relevant partnership property is counted.
- Several exclusions can remove land interests from the calculation.
Scroll down for the full analysis.
Read the original guidance here:
Type B partnership transfers and Land Transaction Tax
Buying a share in a partnership does not usually trigger Land Transaction Tax (LTT). But a special rule applies to a property-investment partnership. Under that rule, a Type B transfer may bring LTT into play by treating the share transfer as a land transaction.
What this rule is about
In Wales, Land Transaction Tax took the place of stamp duty land tax in 2018. Usually, changing ownership of a partnership share does not amount to buying the partnership’s land.
The exception matters where the partnership mainly invests in, or deals in, land interests. The law calls this a property-investment partnership. It can include land outside Wales when deciding whether the partnership has that main activity.
Why does this matter? The tax calculation can use the value of some land held by the partnership, even though the buyer has bought a partnership share rather than a property title.
What the official source says
A Type B transfer is any transfer covered by the property-investment partnership rule that is not a Type A transfer. Type A transfers include certain arrangements in which a person gives money or something else of value for a partner’s share.
Begin a Type B transfer analysis by identifying every land interest held by the partnership immediately after the transfer. Then leave out the interests listed below. The remaining interests make up relevant partnership property.
- Leave out land transferred into the partnership as part of the same transaction.
- Leave out a lease that meets the market-rent lease conditions.
- Leave out land that is not economically linked to the partnership share transferred.
- Leave out land transferred into the partnership on or before 22 July 2004.
- Exclude land subject to an election that disapplies the rules for a transfer into the partnership.
- Exclude other land if, when it was earlier transferred into the partnership, that transfer did not fall within the relevant partnership transfer rules then applying.
The official page is guidance. Schedule 7 to the Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 is the law that decides the result.
What this means in practice
The key question is not simply what land the partnership owns. Ask which land remains within the relevant partnership property once each exclusion has been checked.
Where relevant partnership property contains a land interest, the rules regard the share transfer as an LTT transaction. The calculation uses a share of that property’s market value. Work out that share from the buyer’s partnership share after the transfer, or from the increase in that share.
- Identify the buyer’s percentage share before and after the change.
- List every land interest the partnership holds after the transfer.
- Check each item against the Type B exclusions.
- Value the property that remains after those checks.
- Keep the documents behind the figures and exclusions.
People can miss this point: a property may be excluded for one reason yet included for another, so review every potentially relevant interest separately before calculating. Each property interest needs its own review.
How to analyse it
Work through the facts in order. Do not start with a tax figure. First decide whether this is the type of partnership and transfer that the special rule covers.
- Is the partnership’s sole or main activity investing in, or dealing in, land interests?
- Has someone become a partner, or has an existing partner’s share increased?
- Does the arrangement meet the definition of Type A instead?
- What land interests does the partnership hold immediately after the transfer?
- Was any interest transferred in as part of this deal?
- Does any interest lack an economic connection with the share being transferred?
- Did the partnership receive the interest on or before 22 July 2004?
- Was an election made when land entered the partnership?
- For a lease, do all the market-rent conditions actually hold?
Market rent is not just a label in a lease. The statutory test also looks at what was paid when the lease was granted, the rent level, the term and rent reviews.
Example
Illustration: Priya joins a partnership that mainly owns investment property. She receives a 25% partnership share. After the transfer, the partnership holds a building worth £800,000 and a separate lease that meets every market-rent condition required for market-rent treatment.
The lease is left out. If the building is relevant partnership property and no other exclusion applies, the value used for the Type B calculation is 25% of £800,000: £200,000. This shows the method only. It does not state the LTT due, because the applicable rates are not given in the source.
Why this can be difficult in practice
You might think a partnership’s accounts settle the issue. They do not always. To apply the legal tests, examine the partnership’s activity, the transfer’s terms, and the history attached to each individual land interest before reaching a conclusion.
Older property can be especially hard to trace. So can a claim that a property is not economically linked to the share transfer.
- A partnership may carry on more than one activity, making its main activity unclear.
- A lease must meet every market-rent condition, not merely charge a commercial-looking rent.
- An election under the earlier transfer rules is irrevocable and should be checked in the return records.
- The supplied guidance and the current statutory wording need date-specific checking for the final exclusion.
Key takeaways
- A Type B transfer is a property-investment partnership share transfer that is not Type A.
- Only relevant partnership property is used for the special LTT calculation.
- The property history and partnership records can decide the answer.
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 7 para 5 — when buying a partnership share is normally outside ltt
- LTTA 2017 Schedule 7 para 33 — what makes a partnership a property-investment partnership
- LTTA 2017 Schedule 7 para 34 — when a partnership-share transfer becomes an ltt transaction; property included for a type b transfer; how type a and type b transfers differ
- LTTA 2017 Schedule 7 para 35 — when a market-rent lease is left out
- LTTA 2017 Schedule 7 para 36 — election to disapply partnership transfer rules
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 a partnership’s sole or main activity is property investment can depend on its real activities, not simply its name or stated purpose.
- Whether an interest is economically attributable to the partnership share being transferred can be fact-sensitive.
- The supplied official guidance describes one exclusion more narrowly than the current statutory wording supplied for Schedule 7 paragraph 34(7)(f). The law in force on the transaction date should 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 partnership agreement and records of each partner’s shares before and after the transfer
- A list and value of land interests held immediately after the transfer
- Documents showing when each land interest entered the partnership
- Any election under Schedule 7 paragraph 36 and the relevant LTT return
- Lease documents, rent evidence and review clauses for any claimed market-rent lease exclusion
- Evidence of the partnership’s actual main activity
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 Type B partnership transfers and Land Transaction Tax [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 7 para 5 - when buying a partnership share is normally outside ltt https://www.legislation.gov.uk/anaw/2017/1/schedule/7/paragraph/5 - LTTA 2017 Schedule 7 para 33 - what makes a partnership a property-investment partnership https://www.legislation.gov.uk/anaw/2017/1/schedule/7/paragraph/33 - LTTA 2017 Schedule 7 para 34 - when a partnership-share transfer becomes an ltt transaction https://www.legislation.gov.uk/anaw/2017/1/schedule/7/paragraph/34 - LTTA 2017 Schedule 7 para 34 - property included for a type b transfer https://www.legislation.gov.uk/anaw/2017/1/schedule/7/paragraph/34 - LTTA 2017 Schedule 7 para 34 - how type a and type b transfers differ https://www.legislation.gov.uk/anaw/2017/1/schedule/7/paragraph/34 - LTTA 2017 Schedule 7 para 35 - when a market-rent lease is left out https://www.legislation.gov.uk/anaw/2017/1/schedule/7/paragraph/35 - LTTA 2017 Schedule 7 para 36 - election to disapply partnership transfer rules https://www.legislation.gov.uk/anaw/2017/1/schedule/7/paragraph/36 Guidance page from the Welsh Revenue Authority on this topic (guidance, not law): https://www.gov.wales/partnerships-and-land-transaction-tax-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 - Whether a partnership's sole or main activity is property investment can depend on its real activities, not simply its name or stated purpose. - Whether an interest is economically attributable to the partnership share being transferred can be fact-sensitive. - The supplied official guidance describes one exclusion more narrowly than the current statutory wording supplied for Schedule 7 paragraph 34(7)(f). The law in force on the transaction date should 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 4 September 2026
Useful article? You may find it helpful to read the original guidance here: Type B partnership transfers and Land Transaction Tax
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