diff --git a/api/src/owner_rpc.rs b/api/src/owner_rpc.rs
index 628d8ef..92511b0 100644
--- a/api/src/owner_rpc.rs
+++ b/api/src/owner_rpc.rs
@@ -973,7 +973,7 @@ pub trait OwnerRpc {
 				"id": "0436430c-2b02-624c-2032-570501212b00",
 				"sigs": [],
 				"sta": "S3",
-				"ver": "4:3"
+				"ver": "4:5"
 			}
 		}
 	}
diff --git a/controller/src/controller.rs b/controller/src/controller.rs
index c2f2c4e..ef61152 100644
--- a/controller/src/controller.rs
+++ b/controller/src/controller.rs
@@ -66,22 +66,18 @@ lazy_static! {
 
 fn check_middleware(
 	name: ForeignCheckMiddlewareFn,
-	node_version_info: Option<NodeVersionInfo>,
+	_node_version_info: Option<NodeVersionInfo>,
 	slate: Option<&Slate>,
 ) -> Result<(), Error> {
 	match name {
 		// allow coinbases to be built regardless
 		ForeignCheckMiddlewareFn::BuildCoinbase => Ok(()),
 		_ => {
-			let mut bhv = 3;
-			if let Some(n) = node_version_info {
-				bhv = n.block_header_version;
-			}
 			if let Some(s) = slate {
-				if bhv > 4 && s.version_info.block_header_version < GRIN_BLOCK_HEADER_VERSION {
+				if s.version_info.block_header_version > GRIN_BLOCK_HEADER_VERSION {
 					Err(Error::Compatibility(
 						"Incoming Slate is not compatible with this wallet. \
-						 Please upgrade the node or use a different one."
+						 Please upgrade the wallet."
 							.into(),
 					))?;
 				}
diff --git a/controller/tests/transaction.rs b/controller/tests/transaction.rs
index 6c3d8e5..5425ef8 100644
--- a/controller/tests/transaction.rs
+++ b/controller/tests/transaction.rs
@@ -23,7 +23,7 @@ use grin_core as core;
 use self::core::core::transaction;
 use self::core::core::Transaction;
 use self::core::global;
-use self::libwallet::{InitTxArgs, OutputStatus, Slate, SlateState};
+use self::libwallet::{InitTxArgs, OutputStatus, Slate, SlateState, GRIN_BLOCK_HEADER_VERSION};
 use impls::test_framework::{self, LocalWalletClient};
 use std::convert::TryInto;
 use std::path::PathBuf;
@@ -105,6 +105,7 @@ fn basic_transaction_api(test_dir: &'static str) -> Result<(), libwallet::Error>
 	// assert wallet contents
 	// and a single use api for a send command
 	let amount = 60_000_000_000;
+	let header_version = core::consensus::header_version(chain.head().unwrap().height).0;
 	let mut slate = Slate::blank(1, false);
 	wallet::controller::owner_single_use(
 		wallet1.clone(),
@@ -124,6 +125,7 @@ fn basic_transaction_api(test_dir: &'static str) -> Result<(), libwallet::Error>
 			let slate_i = sender_api.init_send_tx(m, args)?;
 
 			assert_eq!(slate_i.state, SlateState::Standard1);
+			assert_eq!(slate_i.version_info.block_header_version, header_version);
 
 			// Check we are creating a tx with the expected lock_height of 0.
 			// We will check this produces a Plain kernel later.
@@ -131,6 +133,26 @@ fn basic_transaction_api(test_dir: &'static str) -> Result<(), libwallet::Error>
 
 			slate = client1.send_tx_slate_direct("wallet2", &slate_i)?;
 			assert_eq!(slate.state, SlateState::Standard2);
+
+			// wallet2 already has this slate, so accepted versions fail on the duplicate check
+			for bhv in 1..=GRIN_BLOCK_HEADER_VERSION + 1 {
+				let mut s = slate_i.clone();
+				s.version_info.block_header_version = bhv;
+				let res = wallet::controller::foreign_single_use(
+					wallet2.clone(),
+					PathBuf::from(test_dir),
+					mask2_i.clone(),
+					|api| api.receive_tx(&s, None, None).map(|_| ()),
+				);
+				if bhv <= GRIN_BLOCK_HEADER_VERSION {
+					assert!(matches!(
+						res,
+						Err(libwallet::Error::TransactionAlreadyReceived(_))
+					));
+				} else {
+					assert!(matches!(res, Err(libwallet::Error::Compatibility(_))));
+				}
+			}
 			sender_api.tx_lock_outputs(m, &slate)?;
 			slate = sender_api.finalize_tx(m, &slate)?;
 			assert_eq!(slate.state, SlateState::Standard3);
diff --git a/libwallet/src/internal/tx.rs b/libwallet/src/internal/tx.rs
index 449f98f..6b655e3 100644
--- a/libwallet/src/internal/tx.rs
+++ b/libwallet/src/internal/tx.rs
@@ -18,8 +18,7 @@ use byteorder::{BigEndian, ReadBytesExt, WriteBytesExt};
 use std::io::Cursor;
 use uuid::Uuid;
 
-use crate::grin_core::consensus::valid_header_version;
-use crate::grin_core::core::HeaderVersion;
+use crate::grin_core::consensus::header_version;
 use crate::grin_keychain::{Identifier, Keychain};
 use crate::grin_util::secp::key::SecretKey;
 use crate::grin_util::secp::pedersen;
@@ -70,17 +69,7 @@ where
 	}
 	slate.amount = amount;
 
-	if valid_header_version(current_height, HeaderVersion(1)) {
-		slate.version_info.block_header_version = 1;
-	}
-
-	if valid_header_version(current_height, HeaderVersion(2)) {
-		slate.version_info.block_header_version = 2;
-	}
-
-	if valid_header_version(current_height, HeaderVersion(3)) {
-		slate.version_info.block_header_version = 3;
-	}
+	slate.version_info.block_header_version = header_version(current_height).0;
 
 	// Set the features explicitly to 0 here.
 	// This will generate a Plain kernel (rather than a HeightLocked kernel).
diff --git a/libwallet/src/slate_versions/mod.rs b/libwallet/src/slate_versions/mod.rs
index ca2e749..05416d9 100644
--- a/libwallet/src/slate_versions/mod.rs
+++ b/libwallet/src/slate_versions/mod.rs
@@ -34,8 +34,8 @@ pub mod v4_bin;
 /// The most recent version of the slate
 pub const CURRENT_SLATE_VERSION: u16 = 4;
 
-/// The grin block header this slate is intended to be compatible with
-pub const GRIN_BLOCK_HEADER_VERSION: u16 = 3;
+/// The latest grin block header version this wallet supports
+pub const GRIN_BLOCK_HEADER_VERSION: u16 = 5;
 
 /// Existing versions of the slate
 #[derive(EnumIter, Serialize, Deserialize, Clone, Debug, PartialEq, PartialOrd, Eq, Ord)]
diff --git a/src/cmd/wallet.rs b/src/cmd/wallet.rs
index e538ef6..9e6c2cb 100644
--- a/src/cmd/wallet.rs
+++ b/src/cmd/wallet.rs
@@ -20,7 +20,7 @@ use semver::Version;
 use std::thread;
 use std::time::Duration;
 
-const MIN_COMPAT_NODE_VERSION: &str = "4.0.0-alpha.1";
+const MIN_COMPAT_NODE_VERSION: &str = "5.0.0-beta.1";
 
 pub fn wallet_command<C>(
 	wallet_args: &ArgMatches<'_>,