Linked property purchases: how Land Transaction Tax is worked out
Linked transactions and LTT
Where connected property purchases form one arrangement, LTT is worked out on their combined price and then divided between them.
- Separate contracts may still be linked
- A later purchase can affect an earlier calculation
- Lease rent follows separate rules
Scroll down for the full analysis.
Read the original guidance here:
Linked property purchases: how Land Transaction Tax is worked out
Linked property purchases: how Land Transaction Tax is worked out
When you buy properties as parts of one plan, you may have to calculate Land Transaction Tax (LTT) from their combined prices rather than calculate it separately for each price. That can increase the tax. LTT is the tax that replaced Stamp Duty Land Tax in Wales.
What this rule is about
The rules describe connected property purchases as linked transactions. The law looks beyond whether there are separate contracts or completion dates. It asks whether the purchases are part of one scheme, arrangement or series.
The connection must involve the same buyer and seller, or people connected with them. Buying two unrelated properties from unrelated sellers will not normally meet this definition.
Why does this matter? When you combine the prices of connected purchases, the calculation can move more of the total into higher bands than separate calculations for each purchase would place there. This can raise the tax.
What the official source says
The Welsh Revenue Authority’s technical guidance gives a three-step method. First, treat all linked purchases as though they form one purchase. Work out the total LTT on the combined amount paid.
- Add together the amounts paid for all the linked purchases.
- Work out the LTT on that combined figure using the relevant bands and rates.
- Divide the price for the purchase in question by the combined price.
- Multiply the total LTT by that fraction.
- The result is the LTT allocated to that purchase.
This is not a simple rule that taxes every purchase at the same amount. When you apply this method, you allocate each purchase a share of the overall tax that matches its share of the total price. The shares can differ.
The official source also says the method applies across the different sets of LTT rates and bands. It specifically notes that rates and bands may change between linked purchases.
What this means in practice
In practice, you need to consider every related purchase, including one that completed earlier or will complete later, rather than focusing only on the purchase completing today. Look at the full arrangement. Because you must consider both purchases together when they form part of the same arrangement, a later purchase can change the calculation you made for an earlier one. This can affect earlier tax.
That can mean an earlier LTT return needs attention again. The supplied guidance says that, when another linked purchase takes place and changes the position, you may need to submit a return or further return. It does not give a filing deadline for that situation.
- Tell your conveyancer about planned purchases from the same seller.
- Also mention purchases involving connected buyers or sellers.
- Keep copies of all contracts and completion statements.
- Check the tax calculation for each linked purchase, including earlier ones.
- Check which rates and bands applied on each relevant date.
Do not assume separate contracts make the tax separate. That is the part people often miss.
How to analyse it
Start with the facts, not the calculation. The key question is whether the purchases form one wider arrangement. Only then should you combine the figures.
- List every property purchase that may be connected.
- Identify the buyer and seller for each purchase.
- Check whether any of those people or companies are connected.
- Read the contracts and any linked agreement together.
- Ask whether the purchases form one scheme, arrangement or series.
- Add the prices for purchases that are linked.
- Work out tax on that combined amount.
- Allocate that tax between purchases by their share of the combined price.
What if you buy a property under a lease and part of the payment is rent? The normal three-step rule does not calculate the tax on the rent. Separate lease-rent rules apply instead.
Example
Here is an illustration of the maths only. Asha buys one property for £200,000 and a linked property for £300,000. The combined price is £500,000. Assume that applying the relevant LTT bands to £500,000 produces total tax of £20,000.
The first property is 40% of the combined price: £200,000 divided by £500,000. Its share of the tax is therefore £8,000: 40% of £20,000. The second property is 60% of the combined price, so its share is £12,000.
The example does not assume any particular LTT rate or threshold. Check those against the rates in force for the transactions.
Why this can be difficult in practice
The calculation itself is straightforward. Deciding whether purchases are linked may not be. When you decide whether purchases are linked, a common purpose, negotiations between connected people, and documents that refer to more than one property can all matter. Context matters.
You might think a delay between completions settles the point. It does not. The statutory test is about a single scheme, arrangement or series, not simply whether the deals completed on the same day.
- Separate contracts can still be part of one arrangement.
- Different completion dates do not automatically prevent a link.
- Connections between people can matter as much as the property deals.
- A later deal can affect tax previously worked out on an earlier one.
- Lease rent needs a different calculation method.
Key takeaways
- Linked purchases are combined before LTT is worked out.
- The combined tax is split by each purchase’s share of the total price.
- Check earlier LTT calculations when a later linked purchase happens.
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 8 — when land purchases count as linked transactions
- LTTA 2017 section 27 — calculating LTT for purchases that are not linked
- LTTA 2017 section 28 — calculating LTT where purchases are linked
- LTTA 2017 Schedule 6 para 30 — calculating lease rent tax for linked transactions
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 official extract refers to an example involving changed rates and bands, but that example and its figures were not supplied.
- Whether separate purchases form one scheme, arrangement or series can depend on the full facts.
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.
- Contracts, completion statements and any side agreements for every related purchase.
- Details of each buyer and seller, including whether any are connected.
- The prices paid for every potentially linked purchase.
- The effective date of each purchase and the rates and bands then in force.
- Any earlier LTT return and tax calculation.
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 Linked property purchases: how Land Transaction Tax is worked out [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 8 - when land purchases count as linked transactions https://www.legislation.gov.uk/anaw/2017/1/section/8 - LTTA 2017 section 27 - calculating LTT for purchases that are not linked https://www.legislation.gov.uk/anaw/2017/1/section/27 - LTTA 2017 section 28 - calculating LTT where purchases are linked https://www.legislation.gov.uk/anaw/2017/1/section/28 - LTTA 2017 Schedule 6 para 30 - calculating lease rent tax for linked transactions https://www.legislation.gov.uk/anaw/2017/1/schedule/6/paragraph/30 Guidance page from the Welsh Revenue Authority on this topic (guidance, not law): https://www.gov.wales/calculation-land-transaction-tax-payable-technical-guidance#6944 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 official extract refers to an example involving changed rates and bands, but that example and its figures were not supplied. - Whether separate purchases form one scheme, arrangement or series can depend on the full facts. 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: Linked property purchases: how Land Transaction Tax is worked out
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