Understanding Section 75A: Conditions and Application in Land Transactions

When SDLT section 75A may apply to linked transactions

Section 75A is an anti-avoidance rule for SDLT. It can apply where land or an interest in land passes from one person to another through connected transactions, and the total SDLT paid is less than would have been due on a simple direct transfer between them.

• HMRC looks at the overall effect of the arrangement, not just each step on its own.
• The rule may apply only if there is a disposal by one person (V), an acquisition by another person (P), and connected transactions that include both events.
• P does not always need to acquire exactly the same interest that V disposed of; an interest derived from it may be enough.
• The key comparison is between the SDLT actually payable on all connected transactions and the SDLT that would have been due on a notional direct transfer from V to P.
• Section 75A only operates where there has been a land transaction involving the acquisition of a chargeable interest.
• In practice, difficulties often arise in identifying V and P, deciding which transactions are connected, and working out the correct hypothetical direct transfer.

Scroll down for the full analysis.

When SDLT section 75A can apply: linked transactions that reduce the tax

This page explains the basic trigger for section 75A of the SDLT rules. Section 75A is an anti-avoidance provision. It is aimed at arrangements where land passes, directly or indirectly, from one person to another through a series of connected steps, and the total SDLT paid on those steps is less than the SDLT that would have been due on a simple direct transfer.

What this rule is about

Section 75A is concerned with the overall effect of a set of transactions, not just the legal form of each step looked at on its own. The question is whether a person who starts with a chargeable interest in land effectively disposes of it, another person effectively ends up with it or with an interest derived from it, and the route used produces less SDLT than a straightforward transfer would have done.

The provision does not apply just because there are several steps. Nor does it apply just because tax planning is involved. The official material says three conditions must all be present and must be considered together.

What the official source says

HMRC’s manual says section 75A applies where all of the following conditions are met:

• one person, called V, disposes of a chargeable interest;
• another person, called P, acquires that interest, or a chargeable interest derived from it;
• a number of transactions are involved in connection with that disposal and acquisition, including the disposal and the acquisition; and
• the total SDLT payable on all of those transactions is less than the SDLT that would have been payable on a notional land transaction in which V simply transferred the chargeable interest directly to P.

The manual also makes two preliminary points:

• all of those conditions must be read together; and
• section 75A can only apply if there has been a land transaction, meaning an acquisition of a chargeable interest.

The source points readers to the statutory definitions of “acquisition” and “chargeable interest” elsewhere in the SDLT legislation.

What this means in practice

The practical effect is that HMRC may look past the individual steps in a wider arrangement and compare the SDLT actually paid with the SDLT that would have been due if the land had simply been transferred from the original owner to the eventual acquirer.

This means that it is not enough to ask whether each separate step has its own SDLT treatment. You also need to ask whether, taken together, the steps move a chargeable interest from V to P in a way that produces a lower SDLT outcome overall.

The phrase “derived from it” matters. P does not necessarily have to acquire exactly the same legal interest that V disposed of. It may be enough that P acquires an interest that comes out of, or is created from, the original chargeable interest.

The comparison is with a hypothetical direct transaction. The manual describes this as a “notional land transaction” from V to P. So the analysis is comparative:

• first, identify the actual SDLT payable across the connected transactions;
• then compare that with the SDLT that would have been payable on a direct transfer from V to P.

If the actual total is lower, one of the key conditions for section 75A is present. But that condition alone is not enough. You still need the disposal by V, the acquisition by P, and the required connection between the transactions.

How to analyse it

A sensible way to approach section 75A from this source material is to work through the following questions.

• Has there been a land transaction at all? Section 75A only operates where there is an acquisition of a chargeable interest.
• Who is V? Identify the person who disposes of the chargeable interest.
• Who is P? Identify the person who ultimately acquires that interest, or an interest derived from it.
• What are the relevant transactions? List all transactions said to be involved in connection with the disposal and acquisition.
• Do those transactions include both the disposal by V and the acquisition by P? The source says they must.
• What SDLT is payable on all of the actual transactions taken together?
• What SDLT would have been payable on a notional direct transfer from V to P?
• Is the actual total lower than the notional amount?

This framework shows why the source says the conditions must be read together. It is possible for a set of transactions to reduce SDLT overall, but still fall outside section 75A if there is no relevant disposal and acquisition pattern, or if there is no land transaction involving a chargeable interest.

Example

This is an illustration of the structure of the rule, not a statement of any concluded tax result.

Suppose A owns a freehold. Through a series of connected steps, B ends up with a lease or other chargeable interest created out of that freehold. SDLT is paid on the individual steps, but the total paid is lower than the SDLT that would have been due if A had simply transferred the relevant chargeable interest directly to B.

On those facts, section 75A may need to be considered because:

• A may be V, the person disposing of a chargeable interest;
• B may be P, the person acquiring that interest or an interest derived from it;
• there are multiple connected transactions; and
• the total SDLT on the actual steps is lower than on the hypothetical direct transfer.

The detailed outcome would still depend on the precise facts, including what interests were actually disposed of and acquired.

Why this can be difficult in practice

The manual page is short, but the concepts are not always straightforward to apply.

First, identifying V and P may be easy in a simple case but difficult in a multi-party arrangement. The legislation looks at who disposed of the original chargeable interest and who acquired the relevant interest at the end of the chain.

Second, deciding whether P acquired “that interest” or an interest “derived from it” can be fact-sensitive. The answer depends on the legal nature of the interests created, transferred, or retained.

Third, the phrase “in connection with” is broad. In practice, there may be argument over which transactions belong in the scheme and which do not.

Fourth, the comparison with a notional direct transfer is a legal and computational exercise. You need to identify what the hypothetical transaction is before you can compare the SDLT outcomes properly.

Finally, the source is an HMRC manual. It explains HMRC’s approach, but the legal effect comes from the legislation itself. The manual is useful for understanding how HMRC frames the issue, but the statutory wording remains decisive.

Key takeaways

• Section 75A is aimed at arrangements where land moves from one person to another through connected steps and the total SDLT is lower than on a direct transfer.
• All the conditions must be considered together: disposal by V, acquisition by P, connected transactions, and a lower overall SDLT result.
• The rule only applies where there has been a land transaction involving the acquisition of a chargeable interest.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Understanding Section 75A: Conditions and Application in Land Transactions

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