FTT Rejects Replacement of Main Residence Relief: Property Sale Delays Cannot Override Statutory Three-Year Limit

This case concerned a hearing before the First-tier Tribunal (FTT) of the appellant’s claim for a refund of the higher rates of Land Transaction Tax (LTT). LTT is a devolved tax on chargeable consideration for land transactions in Wales, governed by the Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 (LTTA) and administered by The Welsh Revenue Authority (WRA). The dispute arose under Paragraph 8 Schedule 5 of LTTA, which permits a refund of the higher residential rates where a taxpayer disposes of a previous main residence within three years of acquiring a new residential property.                           

The appellant purchased a residential property in Wales on 28 November 2019. The higher rate of LTT applied because the appellant owned an additional dwelling at the effective date of transaction. He intended to sell the previous main residence and replace it with the property. However, the sale was delayed and ultimately completed after the three-year statutory period.

The appellant argued that the three-year statutory period should be extended due to the exceptional circumstances caused by the Covid-19 pandemic. He relied on the impact of the Coronavirus Act 2020, which imposed lockdown, that he argued, prevented the effective marketing of his previous main residence.

The FTT dismissed the appeal. It held that the three-year period was fixed by statute and provided no extension. The tribunal noted that the Coronavirus Act 2020 made no amendments to Schedule 5 LTTA, and at the relevant time, the WRA had no discretion to permit exceptional circumstances. Amendments providing for flexibility apply only to transactions entered into on or after 12 July 2024 and hence were not applicable to the appellant. FTT confirmed that tax relief must follow the statute as written.

Read the full decision of Jonathan Paul Padbury v. The Welsh Revenue Authority [2025] UKFTT 396 (TC) here.