Sale and leaseback around 1 April 2018: SDLT and LTT
Historic sale and leaseback rule
A Welsh sale before 1 April 2018 could stay within SDLT even where the buyer granted a lease back after that date.
- The sale value includes the leaseback’s market value and other value given.
- The later leaseback can receive LTT relief.
- Schedule 9 conditions must still be met.
Scroll down for the full analysis.
Read the original guidance here:
Sale and leaseback around 1 April 2018: SDLT and LTT
Two tax systems can arise if you sold Welsh land before 1 April 2018 and leased it back after that date. For the sale, SDLT was the stamp duty tax then used in Wales. LTT relief could cover the later leaseback.
What this rule is about
This historic crossover rule concerns the start of Land Transaction Tax in Wales on 1 April 2018. A sale and leaseback can involve two linked steps: you sell an interest in land, then the buyer grants a lease back to you.
Dates matter here. A single arrangement can straddle the change from SDLT to LTT.
What the official source says
Under the Welsh Government’s transitional guidance, a sale before 1 April 2018 is subject to SDLT. If sale and leaseback relief applies, no LTT is charged on a leaseback made on or after that date.
- The sale must take place before 1 April 2018.
- The leaseback must take place on or after 1 April 2018.
- The sale part remains an SDLT matter.
- The value used for the sale includes the market value of the leaseback.
- It also includes cash or other value given for the sale.
What this means in practice
A leaseback made later cannot recast the earlier sale as an LTT transaction. It cannot. Since the sale and leaseback happened on opposite sides of the changeover date, the two parts receive different treatment under the tax systems that applied at those times. Here, the dates control.
Legislation, rather than the guidance alone, sets the leaseback relief. Schedule 9 says that relief applies only where the arrangement meets its conditions.
- Keep the sale and lease documents together.
- Check the date for each part of the arrangement.
- Identify everything given in return for the sale.
- Check whether the leaseback has a market value.
How to analyse it
First, set out the timeline. Then test whether the linked steps meet Schedule 9 as a real sale and leaseback, rather than amounting merely to two separate property dealings. Check the documents.
- Was a major interest in the land transferred to the buyer?
- Did that buyer grant a lease out of that interest back to the seller?
- Was the sale agreed wholly or partly in return for the leaseback?
- Was any extra value limited to money or debt?
- Was there a transfer of rights or a pre-completion transaction?
- If both parties were companies, were they in the same group?
Example
Nia sells land in Wales on 30 March 2018. On 2 April 2018, the buyer grants her a lease back. Under the guidance, SDLT deals with the sale. Its value includes the value of Nia’s leaseback and any cash paid. The leaseback can receive LTT relief if the Schedule 9 conditions are met.
Why this can be difficult in practice
A common mistake is to focus only on the sale date. That is not enough. Both the leaseback date and the value exchanged under the arrangement matter.
A label of sale and leaseback may appear to settle the issue. It does not. The documents and the facts must fit the statutory conditions.
- A cash price may not be the whole value of the sale.
- The leaseback’s market value may need to be worked out.
- Company group status can affect the relief.
- The official page does not explain the SDLT calculation for the sale.
Key takeaways
- This rule applies only to the 2018 changeover period.
- A pre-April sale can remain subject to SDLT.
- A later qualifying leaseback can be relieved from LTT.
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 9 para 1 — relief for the leaseback part of an arrangement
- LTTA 2017 Schedule 9 para 2 — what counts as a sale and leaseback arrangement
- LTTA 2017 Schedule 9 para 3 — conditions that must be met for relief
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.
- Welsh Government, Transitional guidance on the introduction of Land Transaction Tax, section 11.2
Where this is not settled
- The official source does not explain how SDLT was calculated on the sale element.
- The source does not set out how to determine the relevant transaction dates where documents and completion dates differ.
- The facts must be checked against every qualifying condition in Schedule 9 before treating the leaseback as relieved.
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 signed sale and lease documents
- Dates on which the sale and leaseback took place
- Details of cash, debt and any other value given
- Evidence showing whether the parties were connected companies
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 Sale and leaseback around 1 April 2018: SDLT and LTT [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 9 para 1 - relief for the leaseback part of an arrangement https://www.legislation.gov.uk/anaw/2017/1/schedule/9/paragraph/1 - LTTA 2017 Schedule 9 para 2 - what counts as a sale and leaseback arrangement https://www.legislation.gov.uk/anaw/2017/1/schedule/9/paragraph/2 - LTTA 2017 Schedule 9 para 3 - conditions that must be met for relief https://www.legislation.gov.uk/anaw/2017/1/schedule/9/paragraph/3 Guidance page from the Welsh Revenue Authority on this topic (guidance, not law): https://www.gov.wales/transitional-guidance-introduction-of-land-transaction-tax 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 official source does not explain how SDLT was calculated on the sale element. - The source does not set out how to determine the relevant transaction dates where documents and completion dates differ. - The facts must be checked against every qualifying condition in Schedule 9 before treating the leaseback as relieved. 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: Sale and leaseback around 1 April 2018: SDLT and LTT
Search Land Tax Advice with Google
