The draft legislation may not give the Welsh government’s intended outcome for full and partial LTT relief for special tax sites.

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ICAEW’s Tax Faculty has responded to the Welsh government’s consultation on land transaction tax (LTT) relief for special tax sites in freeports and investment zones.  

The intention is that the relief will broadly be equivalent to stamp duty land tax (SDLT) relief available in special tax sites in England. However, LTT relief is subject to six key differences, including the following: 

  • it can only be claimed in relation to land within the designated special tax site and can allow for full relief and partial relief; and
  • relief related to alternative finance arrangements will not follow SDLT in making a ‘relevant person’ liable to file the further return and pay LTT where the relief is withdrawn. 

ICAEW’s primary concern is whether the draft legislation delivers the Welsh government’s intended outcome for full and partial relief. 

The decision to take a different approach from SDLT is a policy matter for the Welsh government. The different policy for alternative finance arrangements, is because the responsibility for making a further return already differs from the SDLT rules.  

ICAEW believes that adopting a different policy to that in England creates scope for confusion about the extent to which relief is available, and who is responsible for compliance. The extra complication of the proposed relief may discourage investment.  

ICAEW’s Tax Faculty is recognised internationally as a leading authority and source of expertise on taxation. The faculty is the voice of tax for ICAEW, responsible for all submissions to the tax authorities. Join the Faculty for expert guidance and support enabling you to provide the best advice on tax to your clients or business.



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