LTT charities relief when more than half the land will support charity work
Charities relief and the greater-part rule
A Welsh charity may obtain LTT relief where it intends to keep more than half of a property’s value for qualifying charitable purposes, even if it will not keep all of it.
- WRA says greater part means more than 50% by monetary value.
- The valuation must be just and reasonable.
- Later sales, certain leases and non-charitable use can lead to a partial clawback.
Scroll down for the full analysis.
Read the original guidance here:
LTT charities relief when more than half the land will support charity work
LTT charities relief when more than half the land will support charity work
A charity may still get Land Transaction Tax relief when it does not plan to keep every part of a property for charity work. The key question is whether it plans to keep the greater part for qualifying charitable purposes. For LTT, Wales’s tax often called stamp duty, that can make a large difference.
What this rule is about
Normally, full charities relief requires the charity to intend to hold all the land for qualifying charitable purposes. Those purposes include using it to further its own aims, or another charity’s aims. They also include holding it as an investment where the profits support the charity.
Life is not always that neat. A charity may buy a building, retain the useful part, and plan to sell another part. Schedule 18 provides a route for that situation. Where the charity intends to keep the greater part for qualifying charitable purposes, it treats the charity as qualifying.
This is not a test based on what looks like most of the site. Value decides it.
What the official source says
WRA’s technical guidance says that “the greater part” means more than 50% of the monetary value of the property bought. The value must be split on a just and reasonable basis. The guidance is WRA’s view of the legislation. It is not the law itself.
- The charity need not intend to hold every part of the property for qualifying charitable purposes.
- It must intend to hold more than half of the property’s value for those purposes.
- Floor area, the number of floors, and the number of homes do not settle the question.
- A sensible valuation must explain why each part has the value given to it.
- Where the test is met, relief is given by the legislation as if the charity were a qualifying charity.
The official source also explains what can happen later. If the charity sells part of the land, or starts holding part for a non-charitable use, relief may be withdrawn for a relevant part.
- Withdrawal can be triggered by a transfer of a major interest that is not for the charity’s purposes.
- A lease granted for a premium can also trigger withdrawal.
- For this rule, a low-rent lease has annual rent below £1,000.
- The law treats these special transfer and lease events as occurring on the effective date of the original purchase for the withdrawal rules.
- WRA’s guidance says the charity needs to make a further return when relief is clawed back.
What this means in practice
You may be able to claim full relief at the time of purchase even if part of the property is earmarked for sale. But the retained charitable part must be worth more than the part outside the charity’s plans.
That does not mean the later sale is tax-free. For the part sold or put to another use, relief can be taken back. The amount is meant to reflect the affected share of the original purchase.
What actually decides the answer? Not what you call the land. The answer turns on the charity’s genuine plan at purchase, the value of each part, and what later happens.
- Get a valuation before submitting the LTT return where parts have different values.
- Keep records showing the charity’s planned use of the retained land.
- Identify any planned sale or lease from the outset.
- Review the position if use of any part changes after purchase.
- Keep the original tax calculation, as it may be needed for any clawback.
How to analyse it
Start with the charity’s intention at the time it buys the property. A later change of mind may matter for withdrawal, but it does not rewrite the original intention. Write down the facts rather than relying on a broad statement that the purchase helps the charity.
- Is the buyer a charity for the purposes of the charities relief rules?
- Which parts will the charity hold for its charitable aims or as a qualifying investment?
- What parts will be sold, leased, or held for another use?
- What is the monetary value of each part on a just and reasonable basis?
- Does the charitable part exceed 50% of the total value?
- Has any later sale, lease or change of use affected a part that received relief?
- Does the later event mean that a further LTT return is needed?
Do not confuse a larger physical area with a larger value. A small ground-floor shop may be worth more than several upper floors. The evidence needs to show the value split, not just the plan.
Example
Imagine a charity buys a five-floor office block. From the start, it plans to sell the top three floors and retain the ground and first floors for its work. Each floor has the same area.
The two lower floors are worth 55%. The three upper floors are worth 45%.
Under WRA’s example, the charity can obtain relief because it intends to keep more than half the value for qualifying charitable purposes. Selling upper floors later may withdraw relief. That withdrawal applies only to those floors. The equal floor sizes do not change that result.
WRA illustrates this with ten equal homes. They are bought for £1 million, and three are intended for sale. Three homes represent £300,000, or 30%, of the purchase value. The guidance says any clawback relates to that part.
Its historic tax calculation is inconsistent. Do not reuse its stated tax amount.
Why this can be difficult in practice
Different values can complicate this rule. A charity may use most of the floor space but still fail the greater-part test if the part it plans to sell is more valuable.
Intentions can also be mixed. A loose business plan is less helpful than records showing which parts the charity expected to keep, use, let, or sell when it bought the property.
- More than half the land by area is not enough if it is worth half or less.
- Calling a future sale “incidental” does not remove the need to value it.
- A change of use can matter even where the charity keeps legal ownership.
- A lease with a premium and rent below £1,000 needs particular care.
- The official source’s reporting wording should be checked against the current statutory position.
Key takeaways
- More than 50% of value, not area, is the central test in WRA’s guidance.
- Full relief may be available even where the charity plans to part with some land.
- A later sale, lease or non-charitable use can withdraw relief for an affected part.
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 18 para 2 — qualifying charitable purposes and disqualifying events
- LTTA 2017 Schedule 18 para 3 — full charities relief for qualifying charities
- LTTA 2017 Schedule 18 para 4 — withdrawal and proportionate repayment of charities relief
- LTTA 2017 Schedule 18 para 5 — relief where charitable use covers the greater part
- LTTA 2017 section 49 — further returns when relief is withdrawn
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 Act does not define the words greater part. The more-than-50%-by-value approach comes from WRA guidance, not wording set out in Schedule 18 paragraph 5.
- The official example states tax of £37,750 but then calculates its clawback using £37,500. Those figures do not match, so the £11,250 result should not be treated as a reliable calculation.
- Schedule 18 paragraph 5 treats certain transfer and lease events as occurring on the effective date of the original transaction for the withdrawal rules. The guidance describes a further return after the later disposal or change of use. The reporting timing should be checked against current WRA practice and legislation.
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.
- Plans, valuations and an explanation of how each part’s value was apportioned
- Board papers or trustee records showing the intended use at purchase
- Evidence that the retained part will be used for charitable purposes
- Details of any planned sale, transfer, lease premium or rent
- The original LTT return, completion date 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 LTT charities relief when more than half the land will support charity work [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 18 para 2 - qualifying charitable purposes and disqualifying events https://www.legislation.gov.uk/anaw/2017/1/schedule/18/paragraph/2 - LTTA 2017 Schedule 18 para 3 - full charities relief for qualifying charities https://www.legislation.gov.uk/anaw/2017/1/schedule/18/paragraph/3 - LTTA 2017 Schedule 18 para 4 - withdrawal and proportionate repayment of charities relief https://www.legislation.gov.uk/anaw/2017/1/schedule/18/paragraph/4 - LTTA 2017 Schedule 18 para 5 - relief where charitable use covers the greater part https://www.legislation.gov.uk/anaw/2017/1/schedule/18/paragraph/5 - LTTA 2017 section 49 - further returns when relief is withdrawn https://www.legislation.gov.uk/anaw/2017/1/section/49 Guidance page from the Welsh Revenue Authority on this topic (guidance, not law): https://www.gov.wales/land-transaction-tax-charities-relief-technical-guidance#6159 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 Act does not define the words greater part. The more-than-50%-by-value approach comes from WRA guidance, not wording set out in Schedule 18 paragraph 5. - The official example states tax of £37,750 but then calculates its clawback using £37,500. Those figures do not match, so the £11,250 result should not be treated as a reliable calculation. - Schedule 18 paragraph 5 treats certain transfer and lease events as occurring on the effective date of the original transaction for the withdrawal rules. The guidance describes a further return after the later disposal or change of use. The reporting timing should be checked against current WRA practice and legislation. 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: LTT charities relief when more than half the land will support charity work
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