Repayment interest on Land Transaction Tax refunds in Wales
Repayment interest at a glance
The WRA says it pays simple interest when it repays qualifying devolved tax, penalties, or interest already paid on them.
- The later of the due date and payment date is used.
- The WRA repayment date ends the interest period.
- The rate is at least 0.5% a year, or the Bank of England rate if higher.
Scroll down for the full analysis.
Read the original guidance here:
Repayment interest on Welsh tax refunds
When the Welsh Revenue Authority (WRA) repays Land Transaction Tax (LTT), a penalty, or interest you already paid, it may add repayment interest. In Wales, LTT replaced stamp duty land tax in 2018. Simply sending money does not necessarily trigger interest.
What this rule is about
Repayment interest is an additional amount the WRA may pay when it repays certain qualifying sums. Its purpose is to recognise that the WRA has held money that ought to be returned.
Differences in the start date matter. For a substantial LTT payment, even a minor change can affect the interest paid.
Not every payment made to the WRA qualifies. Money sent in error, where it was not payment of devolved tax or a penalty, falls outside the position described in the official source.
What the official source says
The WRA says it will pay repayment interest when repaying devolved tax, penalties, and interest previously paid on tax or penalties. According to the WRA, interest begins on the later of two dates and ends when the WRA makes the repayment.
- The repayment must concern devolved tax or a penalty.
- It can include interest you had already paid on that tax or penalty.
- Interest starts on the date you paid the amount, if that is later.
- Where that date is later, interest begins when the amount became due to the WRA.
- A weekend or bank holiday can be the start date.
- Interest ends on the date the WRA makes the repayment.
- The rate is the higher of 0.5% a year or the Bank of England rate.
- The interest is simple interest, rather than compound interest.
What this means in practice
First, establish whether the WRA is returning an amount that was genuinely devolved tax, a penalty, or interest previously paid on either, rather than money sent in error. An accidental transfer alone does not qualify under this guidance.
Then identify both possible start dates. The later one applies. This point may appear minor. It means, however, that interest cannot run until the amount is both due and paid.
Simple interest creates another important limit. Only the amount repaid is used in the calculation. Interest accrued during the delay earns no interest itself.
- Keep the payment confirmation, including its date and amount.
- Keep the return, assessment, or other record showing when the amount became due.
- Use the date the WRA actually made the repayment, rather than merely the date it said a refund was due.
- Read the repayment calculation carefully if interest has been added.
- Do not assume an accidental bank transfer earns repayment interest.
How to analyse it
Consider the questions in this order: what is being returned, when was it due, when did you pay it, and when did the WRA repay it? Those facts provide the framework before any interest figure can be checked.
- Is the payment devolved tax, a penalty, or interest on one of them?
- Was the money instead sent to the WRA in error?
- On what date did the amount become payable to the WRA?
- On what date did you actually make the payment?
- Which of those two dates is later?
- When did the WRA make the repayment?
- What was the applicable rate during the relevant period?
- Has the calculation used simple interest only?
Example
Suppose Priya paid £10,000 of LTT on 10 March. Priya paid after the amount became payable: 10 March rather than 1 March. Interest therefore begins on 10 March. If the WRA repays the £10,000 exactly one year later, and the applicable rate is 0.5% throughout, simple interest would be £50.
The calculation is £10,000 multiplied by 0.5%. No further interest is added to that £50. If the Bank of England rate is higher, the official source says the higher rate applies.
Why this can be difficult in practice
People often look only at the date they paid. That alone is insufficient. The official source uses whichever date is later: the payment date or the date on which the amount became payable.
Changes in rates can also make an actual calculation less straightforward than the example. The source confirms the rate floor and the Bank of England comparison, but it does not set out every calculation detail.
- A payment date may differ from the date the money became due.
- A non-business day can still be the start date.
- A repayment notice may not make each part of the calculation obvious.
- Calling a payment an error does not alone settle whether it was tax-related.
- The source does not explain every possible rate-change scenario.
Key takeaways
- Repayment interest can apply to qualifying Welsh tax-related repayments.
- The later of the due date and payment date starts the clock.
- Interest stops when the WRA makes the repayment and is not compounded.
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.
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 bundled statutory materials do not include the Tax Collection and Management (Wales) Act 2016 provisions or the 2018 Regulations needed to verify the current legal text and detailed calculation rules.
- The supplied source does not explain the treatment of a payment made in error where the facts overlap with a tax payment or penalty payment.
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.
- Records showing what was paid, when it was paid, and why it was due.
- The WRA repayment notice or other record showing the repayment date.
- Evidence that the payment related to devolved tax, a penalty, or interest on either.
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 Repayment interest on Land Transaction Tax refunds in Wales [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.] Guidance page from the Welsh Revenue Authority on this topic (guidance, not law): https://www.gov.wales/tax-collection-and-management-wales-act-2016-interest-technical-guidance#6677 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 bundled statutory materials do not include the Tax Collection and Management (Wales) Act 2016 provisions or the 2018 Regulations needed to verify the current legal text and detailed calculation rules. - The supplied source does not explain the treatment of a payment made in error where the facts overlap with a tax payment or penalty payment. 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: Repayment interest on Land Transaction Tax refunds in Wales
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