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Additional Learning Needs and Education Tribunal (Wales) Act
This act received royal assent on 24 January. It makes provision for a new statutory framework for supporting children and young people with additional learning needs. This is to replace existing legislation surrounding special educational needs and the assessment of children and young people with learning difficulties and/or disabilities in post-16 education and training.
The act also continues the existence of the Special Educational Needs Tribunal for Wales and provides for children, their parents and young people to appeal to it against decisions made in relation to their or their child’s additional learning needs – but renames it the Education Tribunal for Wales.
Abolition of the Right to Buy and Associated Rights (Wales) Act
This act received royal assent on 24 January. The key purposes of the act are to:
- abolish the right of eligible secure tenants to buy their home at a discount under part 5 of the Housing Act 1985 (Right to Buy);
- abolish the preserved right of eligible former secure tenants to buy their home at a discount under section 171A of the Housing Act 1985 (Preserved Right to Buy);
- abolish the right of eligible assured or secure tenants of a registered social landlord or private registered provider to acquire their home at a discount under section 16 of the Housing Act 1996 (Right to Acquire);
- encourage social landlords to build or acquire new homes for rent; the right to buy, preserved right to buy and right to acquire will not be exercisable by tenants who move into new social housing stock more than two months after the bill received royal assent, subject to certain exceptions; and
- provide for at least one year after the bill received royal assent before the abolition of the right to buy, preserved right to buy and right to acquire for existing social housing stock comes into force.
The European Union (Withdrawal) Bill/Continuation Bill
The current position of the Welsh government is that it cannot support the European Union (Withdrawal) Bill unless it is amended. Clause 11 of the bill plans to transfer powers in devolved areas from Brussels to Westminster initially as a ‘holding pattern’. Powers repatriated from the European Union over devolved matters, like agriculture and environmental protection, will be in this ‘holding pattern’ before further decisions are taken on which level of government should exercise these powers.
The UK government has promised to make changes to the proposed legislation, but said those changes will not be made until the EU Withdrawal Bill reaches the House of Lords at the end of January 2018 (it was debated by the lords last week) having previously said that they would be introduced during the report stage in the House of Commons.
On 17 January members of the National Assembly for Wales unanimously passed a Plaid Cymru ‘take note’ motion on a legislative proposal for a Welsh Continuation Bill. The purpose of this bill would be to affirm the continuation in Welsh law of all areas previously a matter of EU law that fall within the legislative competence of the National Assembly for Wales in accordance with the Wales Act 2017.
Opposition to the Withdrawal Bill includes the fact that there is no end date for the restriction on the devolved competency of the repatriated powers, and there is no guarantee on the financial autonomy of the Welsh budget. For example, payments made to Welsh farmers under the Common Agricultural Policy are higher than payments they would receive under the Barnett funding formula.
The Welsh government has confirmed that it has worked on a Continuation Bill and will publish it before the end of January 2018 unless it is clear that the UK government will bring forward satisfactory amendments during the remaining stages of the Withdrawal Bill’s passage through the parliament. The Continuation Bill has not been published at the time of going to press.
Land transaction tax
From 1 April, land transaction tax (LTT) will replace UK stamp duty land tax (SDLT) in Wales. Like SDLT, LTT will be payable when you buy or lease a building or land over a certain price.
The legislation is broadly consistent with SDLT, preserving the underlying structure and mirroring key elements such as partnerships, trusts and reliefs.
Changes have been made to:
l simplify the tax and make it fairer;
l improve its efficiency and effectiveness; and
l focus on Welsh needs and priorities.
The Welsh government has announced new rates and bands for both residential and commercial property transactions. The rates are ‘progressive’, which means that buyers of lower-value properties will pay less LTT compared with SDLT, while the buyers of more expensive properties will pay, in some cases, more LTT than SDLT.
Residential properties: LTT rates (right)
| Price Threshold | Main Residential Rates |
|---|---|
|
£0 - £180,000 |
0% |
|
£180,000 - £250,000 |
3.5% |
|
£250,000 - £400,000 |
5% |
|
£400,000 - £750,000 |
7.5% |
|
£750,000 - £1.5 million |
10% |
|
Over £1.5 million |
12% |
Current rates for SDLT (right, below)
| Price Threshold | Main Residential Rates |
|---|---|
|
£0 - £125,000 |
0% |
|
£125,000 - £250,000 |
2% |
|
£250,000 - £925,000 |
5% |
|
£925,000 - £1.5 million |
10% |
|
Over £1.5 million |
12% |
Purchasers of an additional residential property and any purchase by a company (and other non-natural persons) will be subject to an additional rate of LTT of 3%, which is in line with the current rates of SDLT.
The ‘break even’ point where LTT becomes more expensive than SDLT is £400,000. The Welsh government estimates that transactions above this threshold account for 6% of residential property purchases in Wales each year.
Residential purchases below £250,000 will also save with LTT compared to SDLT, with the same amount being charged between £250,000 and £400,000.
The increase in rates of LTT may encourage purchasers to accelerate the purchase of their ‘expensive’ house before 1 April 2018 when LTT comes into force.
In the November UK budget, chancellor Philip Hammond announced the abolition of stamp duty for all properties up to £300,000 bought by first-time buyers with immediate effect. First-time buyers purchasing properties in Wales valued between £180,000 and £300,000 will only benefit from paying 0% tax on their purchase until the devolution of the tax to Wales comes into force in April. The average first-time buyer in Wales pays £131,735 for their first home, which is 31% less than the UK average. The Welsh government estimates that around 80% of first-time buyers in Wales will not pay LTT. The threshold was raised by the Welsh government from £150,000 to £180,000 as a result of the change to SDLT for first-time buyers.
Commercial properties
The differences between the rates of LTT and SDLT for commercial property vary more widely.
| Price threshold | Non-residential LTT rates | Non-residential SDLT rates |
|---|---|---|
|
£0 - £150,000 |
0% |
0% |
|
£150,000 - £250,000 |
1% |
2% |
|
£250,000 - £1million |
5% |
5% |
|
£1 million plus |
6% |
5% |
As can be seen from the table (above), there is a reduction in the charge to LTT for lower-value properties. LTT becomes more expensive compared with SDLT at values in excess of £1m.
Non-residential lease rates
| Net present value (NPV) threshold | Rates |
|---|---|
|
£0 - £150,000 |
0% |
|
£150,000 - £2 million |
1% |
|
£2 million plus |
2% |
In the case of SDLT, the 2% rate of tax takes effect when the net present value (NPV) exceeds £5m. The Welsh government believes the lower commercial property and rental values in Wales support the introduction of higher rates and lower thresholds. It estimates that there will be fewer than 100 transactions in Wales with a NPV of £2m or more in 2018/19.
Again, the first three months of 2018 are likely to see a rush to exchange contracts before the increase in rates of LTT for high-value property transactions takes effect.
Landfill disposals tax rates
From April, landfill disposals tax (LDT) will replace landfill tax in Wales. There are three rates of LDT:
- a lower rate for materials which meet the conditions set out in the act;
- a standard rate for all other material; and
- an unauthorised disposals rate for taxable disposals made at places other than authorised landfill sites.
The cabinet secretary for finance and local government, Mark Drakeford, has confirmed that the lower and standard rates of tax will remain consistent with those in the rest of the UK for a period of two years.
The unauthorised rate will be set at 150% of the standard rate, creating an additional financial deterrent for people seeking to dispose of waste illegally. The rates have been announced and are set out in the table below.
| 2018-19 | 2019-20 (assumed rate) | |
|---|---|---|
|
Standard rate |
£88.95/tonne |
£91.70/tonne |
|
Lower rate |
£2.80/tonne |
£2.90/tonne |
|
Unauthorised disposals rate |
£133.45/tonne |
£137.55/tonne |
Prosecution code
The counsel general of the Welsh government, Jeremy Miles AM, introduced a Welsh government prosecution code for all Welsh government prosecution decisions on 9 January 2018. It only applies to Welsh government decisions to prosecute. Although criminal justice is not a devolved issue, the Welsh government can prosecute in devolved areas. The Welsh government code is based on the existing Crown Prosecution Service code but has been adapted to take Welsh government prosecution functions into account.
The new code sets out the counsel general’s power to commence prosecutions under the Government of Wales Act 2006. The code also contains the prosecution test, which will be applied to all prosecution cases. This test has two separate stages: first, the sufficient evidence test; and second, the public interest stage. The sufficient evidence stage requires the prosecutor to be satisfied that there is sufficient evidence to provide a realistic prospect of conviction against each suspect for each offence. The public interest stage requires prosecutors to go on and consider whether a prosecution is required in the public interest.
The code sets out a number of specific factors for the prosecutor to consider when deciding on the public interest, which vary depending on the context of the prosecution. For example, in the context of an environmental prosecution, a prosecutor will need to consider the impact that the offence may have on the environment. The greater the impact of the offending on the environment, the more likely it is that a prosecution is required. And in the context of a social care prosecution, a prosecutor will need to consider whether there is an element of danger to the health or safety of the public.
Terms of reference of commission on justice in Wales
In September 2017, the first minister of the Welsh government announced the establishment of a commission on justice in Wales to be chaired by the former lord chief justice, Lord Thomas of Cwmgiedd.
The membership and terms of reference of the commission have now been announced. The terms of reference are to review the operation of the justice system in Wales and set a long-term vision for its future, with a view to:
- promoting better outcomes in terms of access to justice, reducing crime and promoting rehabilitation;
- ensuring that the jurisdictional arrangements and legal education address and reflect the role of justice in the governance and prosperity of Wales as well as distinct issues that arise in Wales; and
- promoting the strength and sustainability of the Welsh legal services sector and maximising its contribution to the prosperity of Wales.
The commission started work in December and will publish a report of its findings and recommendations during the course of 2019.
President of Welsh Tribunals
Sir Wyn Williams has been sworn in as president of Welsh Tribunals, a new senior judicial position created by the Wales Act 2017. This is the first senior judicial role which relates solely to Wales.
Consultation on legislative proposal to remove the defence of reasonable punishment
The Welsh government has announced its commitment to bringing an end to the physical punishment of children by removing the defence of reasonable punishment in Wales.
The proposal is not to create a new criminal offence but to remove a defence to the existing offence of common assault or battery.
The closing date for responses to the consultation is 2 April.
Richard Owen is associate professor at the College of Law and Criminology in Swansea
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