Commentary on Sections (and Schedules) Schedule 1: Referendum about commencement of income tax provisions Section 15: Welsh tax on transactions involving interests in land
147.Sections 15 and 16 together provide the mechanism for bringing to an end the collection and management of stamp duty land tax (SDLT) in Wales and allowing the Assembly to bring in its own land transaction tax.
148.Section 15 introduces a new Chapter 3 into Part 4A of GOWA 2006, which defines the scope of this devolved tax, broadly a transaction tax applying to acquisitions of interests in land in Wales. Section 16 disapplies SDLT by excluding land transactions in Wales from the SDLT charge, from a date to be appointed by HM Treasury. Schedule 2 contains further amendments relating to the disapplication of SDLT to Wales.
149.SDLT is a transaction tax which applies to acquisitions of a chargeable interest in land. The definition of “chargeable interest” in section 48 of FA 2003 includes an estate, interest, right or power in or over land in England and Wales or Northern Ireland (land in Scotland is excluded by the Scotland Act 2012, although at the time of the passing of the Wales Act those amendments have not yet come into effect).
150.The tax is to be fully devolved by excluding acquisitions of interests in land in Wales from the charge to SDLT and granting a power to the Assembly to tax those acquisitions. The devolved tax could apply regardless of the residence of any party to the transaction.
151.Subsection (1) of section 15 introduces Chapter 3 (sections 116L and 116M) of new Part 4A of GOWA 2006 which provides for the devolved Welsh tax.
152.New section 116L provides for the devolved Welsh tax and, when read with the amendment to Schedule 7 to GOWA 2006 made by section 6(9), grants a power to the Assembly to charge a transaction tax on those acquisitions. Section 116L(1) provides that a tax charged on a Welsh land transaction and which complies with the requirements of this section is a devolved tax. Section 116L(2) defines a Welsh land transaction.
153.Section 116L(3) makes clear that such a tax may apply regardless of whether or not the transaction is effected by means of a formal document or the residence of the parties to the transaction.
154.Section 116L(4) excludes transactions to the extent that they relate to land below mean low water mark. Section 116L(5) excludes Ministers of the UK and devolved governments and corporate bodies associated with legislatures in the UK. This is in line with similar exemptions within the SDLT legislation and applies to Ministers only when acting in their Ministerial capacity.
155.Subsection (2) of section 15 ensures that the devolved tax cannot apply to a land transaction to which SDLT applies and thereby links commencement of the tax to the disapplication of SDLT in Wales under section 16.