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Wales Begins Collected Devolved Taxes

by Jason Gorringe, Tax-News.com, London

02 April 2018


In a landmark step, Wales took control of a number of taxes levied in the country from April 1, 2018, under the terms of a tax devolution deal with the UK.

From April 1, 2018, Wales's Land Transaction Tax (LTT) replaced the UK's Stamp Duty Land Tax (SDLT); and the Welsh Landfill Disposals Tax replaced the UK's equivalent tax. Both taxes are to be administered by the Welsh Revenue Authority (WRA).

From April 6, 2019, Wales will also receive greater powers, enabling it to set its own rates of personal income tax. The levy will continue to be collected by HM Revenue and Customs and Welsh taxpayers need not take action. Welsh tax will be levied on a taxpayer in Wales as long as HMRC has their correct address.

Under the new rates for land transaction tax (LTT), Wales now has the highest starting threshold for the property tax in the UK, of GBP150,000 (USD210,500), up from GBP125,000. Residential properties costing up to GBP400,000 will pay the same or less tax than under stamp duty land tax – nearly GBP500 less tax than under stamp duty land tax on average.

For properties worth up to GBP250,000, the rate will increase to 2.5 percent from two percent, and will increase by 2.5 percent at value intervals of up to GBP400,000 (five percent), up to GBP750,000 (7.5 percent), and up to GBP1.5m (10 percent). A 12 percent rate will apply on property values above GBP1.5m.

Wales will have the lowest starting rate of tax for the purchase of business premises in the UK, with all businesses buying premises up to the value of GBP1.1m in Wales either paying no tax or up to GBP1,000 less tax than under stamp duty land tax.

TAGS: tax | business | property tax | United Kingdom | stamp duty | Tax

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