LTT: what a proposed counteraction notice means
Proposed LTT counteraction notices
WRA must explain its proposed case before it counteracts a tax advantage under the general anti-avoidance rule.
- The notice must identify the arrangement and tax advantage.
- It must set out the proposed adjustment and any amount payable.
- You may make written representations during the 45-day period or an agreed extension.
Scroll down for the full analysis.
Read the original guidance here:
LTT: what a proposed counteraction notice means
If WRA sends you a proposed counteraction notice, it thinks an artificial tax arrangement has cut your Land Transaction Tax, or LTT. LTT is Wales’s stamp duty tax. This gives you a chance to see WRA’s case and reply before it sends its final notice.
What this rule is about
WRA can use the general anti-avoidance rule to counter a tax advantage from an artificial tax avoidance arrangement. Paying less tax, getting more relief, receiving a repayment or delaying payment can all be tax advantages.
A proposed notice is not simply a bill with a new label. It must tell you what arrangement WRA is looking at, why it thinks there is a problem, and what it plans to change.
That detail matters. Check whether WRA has understood the facts, the documents and the tax calculation correctly.
What the official source says
Before WRA makes this type of counteraction, it must issue a proposed counteraction notice where it considers that an artificial tax avoidance arrangement gave someone a tax advantage and that an adjustment should remove it. This is required by the official source.
- It must identify the arrangement that WRA says is tax avoidance.
- Within the notice, WRA must identify the tax advantage it says arose from the arrangement.
- WRA must explain why it links that advantage to an artificial arrangement.
- It must set out the adjustment WRA proposes to make.
- Any amount you would have to pay under the proposed assessment must be stated.
- That figure may include tax from other WRA action, not only the proposed counteraction.
- Final notice follows 45 days from issue.
- It must say that you can ask WRA to extend that period.
- It must say that you may send written representations during the period.
What this means in practice
Read the notice as a statement of WRA’s proposed case. Check each part against what actually happened. A mistake about one step in a transaction can affect WRA’s conclusion about the whole arrangement.
During the 45-day period, you can challenge WRA’s view in writing. Do not ignore it while waiting for a final answer.
- Record the date shown on the notice and the date you received it.
- Check that WRA has described every relevant step accurately.
- Compare its tax calculation with your return and supporting papers.
- Explain any commercial reason that is missing from WRA’s account.
- Ask for more time if 45 days is not enough to prepare a proper response.
- Keep proof of what you send and when you send it.
How to analyse it
Start with the notice itself. Rather than asking whether the arrangement sounds unusual, ask whether WRA has identified an artificial arrangement, whether a resulting tax advantage arose from it, and whether the adjustment it proposes addresses that advantage rather than a different tax issue. That is the real question.
- What precise transactions, agreements or actions does WRA call the arrangement?
- What tax result does WRA say gave an advantage?
- Why does WRA say the arrangement was artificial?
- What evidence supports a different account of the facts?
- Does the proposed adjustment match the advantage WRA says arose?
- Does the stated amount include separate tax issues that need their own response?
- Can your written response be completed within 45 days?
Example
Imagine that Nia uses several connected steps when buying land. On her LTT return, Nia claims a tax result that WRA says would not have been available without those steps. WRA sends a proposed counteraction notice. It must explain the steps being challenged, the tax advantage WRA says arose, the change it proposes and the amount it says Nia must pay.
Nia might think the notice means the result is already final. It is not final. She can use the response period to show that WRA has missed a document, misunderstood a step, or calculated the proposed amount wrongly.
Why this can be difficult in practice
These cases often involve a chain of documents and events rather than one simple purchase. WRA may look at the whole picture. As a result, a short explanation in the notice can be hard to assess without the underlying paperwork.
The amount shown may also be confusing. Official guidance says it can include other tax arising from separate WRA action.
- A proposed notice does not itself settle whether WRA’s view is right.
- An extension must be requested; it is not automatic.
- A response should address both the facts and the proposed tax effect.
- A figure may cover more than one issue, so check its breakdown.
Key takeaways
- A proposed LTT counteraction notice sets out WRA’s case before its final notice.
- You normally have 45 days from the issue date to make written representations.
- Check the arrangement, the tax advantage, the proposed change and the amount carefully.
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
- TCMA 2016 section 81E — WRA adjustments to remove tax advantages
- TCMA 2016 section 81F — contents and timing of proposed counteraction notices
- TCMA 2016 section 81G — final notice after taxpayer representations
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 supplied material does not explain how WRA will assess the evidence in an individual case.
- The supplied source does not set out the wider challenge and appeal process after a final notice.
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 full steps, agreements and documents forming the arrangement
- Calculations showing the claimed tax result
- Evidence of the commercial reason for each step
- A copy of the proposed notice and its issue date
- Any written representations sent to WRA
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: what a proposed counteraction notice means [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 - TCMA 2016 section 81E - WRA adjustments to remove tax advantages https://www.legislation.gov.uk/anaw/2016/6/section/81E - TCMA 2016 section 81F - contents and timing of proposed counteraction notices https://www.legislation.gov.uk/anaw/2016/6/section/81F - TCMA 2016 section 81G - final notice after taxpayer representations https://www.legislation.gov.uk/anaw/2016/6/section/81G Guidance page from the Welsh Revenue Authority on this topic (guidance, not law): https://www.gov.wales/tax-collection-and-management-wales-act-2016-general-anti-avoidance-rule-technical-guidance#6607 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 supplied material does not explain how WRA will assess the evidence in an individual case. - The supplied source does not set out the wider challenge and appeal process after a final notice. 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: what a proposed counteraction notice means
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