diff --git a/tests/ipu/shape_layout_test.py b/tests/ipu/shape_layout_test.py
new file mode 100644
index 000000000..e89aedd88
--- /dev/null
+++ b/tests/ipu/shape_layout_test.py
@@ -0,0 +1,117 @@
+# Copyright (c) 2023 Graphcore Ltd. All rights reserved.
+#
+# Licensed under the Apache License, Version 2.0 (the "License");
+# you may not use this file except in compliance with the License.
+# You may obtain a copy of the License at
+#
+#     https://www.apache.org/licenses/LICENSE-2.0
+#
+# Unless required by applicable law or agreed to in writing, software
+# distributed under the License is distributed on an "AS IS" BASIS,
+# WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+# See the License for the specific language governing permissions and
+# limitations under the License.
+
+from jax._src import test_util as jtu
+from typing import Any
+import ctypes
+
+import numpy as np
+import numpy.testing as npt
+import jax
+from absl.testing import parameterized
+
+from jax.lib import xla_extension as xe
+
+
+def make_xla_shape(shape: Any, layout) -> xe.Shape:
+  """Build XLA shape with layout.
+  """
+  return xe.Shape.array_shape(xe.PrimitiveType.F32, shape, layout)
+
+
+def make_array_with_layout(data: np.ndarray, layout: Any, device: Any):
+  """Build a JAX array with a specific layout, data and device.
+  """
+  from jax._src.device_array import make_device_array
+
+  data = np.asarray(data)
+  assert data.dtype == np.float32
+  xla_shape = xe.Shape.array_shape(xe.PrimitiveType.F32, data.shape, layout)
+  # Create empty buffer with XLA shape + layout.
+  client = device.client
+  buffer = client.create_uninitialized_buffer(xla_shape)
+  # Read-write buffer view.
+  buffer_ptr = np.asarray(buffer).ctypes.data_as(ctypes.POINTER(ctypes.c_float))
+  buffer_view = np.ctypeslib.as_array(buffer_ptr, shape=data.shape)
+  # Fix the strides of the array!
+  buffer_view = np.lib.stride_tricks.as_strided(
+      buffer_view, buffer_view.shape,
+      np.asarray(buffer).strides
+  )
+  # Copy data into the buffer.
+  buffer_view[:] = data[:]
+  # Build final JAX array.
+  aval = jax.ShapedArray(data.shape, dtype=data.dtype)
+  array = make_device_array(aval, device, buffer)
+  return array
+
+
+class IpuXlaShapeLayoutTest(jtu.JaxTestCase):
+
+  def setUp(self):
+    super().setUp()
+    self.seed = 42
+    np.random.seed(self.seed)
+
+  @parameterized.named_parameters(
+      jtu.cases_from_list({
+          "testcase_name": b,
+          "backend": b
+      } for b in ["cpu", "ipu"])
+  )
+  def test__make_array_with_layout__proper_data_layout(self, backend):
+    device = jax.devices(backend)[0]
+    data = np.random.rand(2, 3, 4).astype(np.float32)
+    layout = (1, 2, 0)
+    arr = make_array_with_layout(data, layout, device)
+    expected_shape = make_xla_shape(data.shape, layout)
+
+    # Make sure we are getting everything right! => different layout from standard C
+    self.assertEqual(arr.device_buffer.xla_shape(), expected_shape)
+    self.assertNotEqual(np.asarray(arr).strides, data.strides)
+    self.assertEqual(arr.device(), device)
+    npt.assert_array_equal(arr, data)
+
+  @parameterized.named_parameters(
+      jtu.cases_from_list({
+          "testcase_name": str(layout),
+          "layout": layout
+      } for layout in [(1, 2, 0), (1, 0, 2), (0, 1, 2)])
+  )
+  def test__fn_change_xla_layout__proper_result(self, layout):
+    # Not passing on CPU backend. Maybe because you can never normally
+    # have a non-standard layout on CPU?
+    backend = "ipu"
+    device = jax.devices("cpu")[0]
+
+    data0 = np.random.rand(2, 3, 4).astype(np.float32)
+    data1 = np.random.rand(2, 3, 4).astype(np.float32)
+
+    arr0 = jax.device_put(data0, device)
+    arr1a = jax.device_put(data1, device)
+    arr1b = make_array_with_layout(data1, layout, device)
+
+    def fn(x, y):
+      return x + y
+
+    # Same jitted function should be compatible with different layouts.
+    fn = jax.jit(fn, backend=backend)
+    # Major to minor layout.
+    out1a = fn(arr0, arr1a)
+    # Custom buffer layout.
+    out1b = fn(arr0, arr1b)
+
+    npt.assert_array_equal(arr1a, arr1b)
+    npt.assert_array_equal(out1a, out1b)
+    npt.assert_array_equal(out1b, data0 + data1)