# The Non-Domestic Rating (Artificial Avoidance Arrangements) (Local Lists) (Wales) Regulations 2026, Paragraph 2: Type 2 – The ratepayer has been wound up voluntarily


(1) An arrangement between a person (“L”) who granted the lease, tenancy or any other form of agreement for occupation and another person (“P”) is an artificial arrangement for the purposes of section 63H(1)(a) of the Act where it makes P the ratepayer of the hereditament and either or both of sub-paragraphs (2) and (3) apply.
(2) Prior to entering into the arrangement with P, L entered into an arrangement with another person (“X”) where X became the ratepayer of a hereditament (either the hereditament referred to in sub-paragraph (1) or another hereditament), and—
(a) X, whilst a party to that arrangement, was wound up voluntarily under Chapters 2 to 5 of Part 4 of the Insolvency Act 1986, and
(b) on the day L enters into the arrangement with P, P has a qualifying connection with X.
(3) P has a qualifying connection with L or with a person providing services to L relating to non-domestic rating, on the day the arrangement is entered into, and either or both of paragraphs (a) and (b) apply—
(a) prior to entering into the arrangement with P, L entered into an arrangement with another person (“Y”) where Y became the ratepayer of a hereditament (either the hereditament referred to in sub-paragraph (1) or another hereditament), and—
(i) on the day that arrangement was entered into, Y had a qualifying connection with L or a person providing services to L relating to non-domestic rating, and
(ii) Y, whilst a party to that arrangement, was wound up voluntarily under Chapters 2 to 5 of Part 4 of the Insolvency Act 1986;
(b) within 3 years of the day the arrangement was entered into between L and P, P was, or is in the process of being, wound up voluntarily under Chapters 2 to 5 of Part 4 of the Insolvency Act 1986.
(4) A person is to be treated as having a qualifying connection with another person—
(a) where both persons are, or one or both were, companies, and
(i) one is, or was, a subsidiary of the other,
(ii) both are, or one or both were, subsidiaries of the same company,
(iii) the same person is, or was, either a director of, or an individual with significant control over, both companies, or
(iv) the same person is, or was, a director of one company and an individual with significant control over the other company, or
(b) where only one person is, or was, a company and the other person (“the second person”) has or had such an interest in that company as would, if the second person were a company, result in it being the holding company of the other.
(5) In this paragraph, “holding company” and “subsidiary” have the meanings given in section 1159 of the Companies Act 2006.

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Source: https://www.legislation.gov.uk/wsi/2026/43/schedule/paragraph/2 (the official version)
Page: https://openlegislation.uk/non-domestic-rating-artificial-avoidance-arrangements-local-lists-wales-regulations-2026/schedule/paragraph-2
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.