Identifying V: Understanding Section 75A (1)(a) Chargeable Interest Disposal

Identifying “V” for SDLT Section 75A

For SDLT section 75A, HMRC says “V” is the person who disposes of the chargeable interest acquired by “P”, or the earlier interest from which P’s interest is derived. Usually this will be the person holding the relevant interest just before the scheme transactions start, but the correct answer always depends on the facts and the real effect of the arrangements.

• Section 75A is an anti-avoidance rule, so identifying “V” correctly is an important part of the overall analysis.
• You should first identify P, then work out exactly what chargeable interest P acquires and where that interest came from.
• V may be the person who directly transfers the interest to P, or the person whose earlier interest is the source of what P ultimately acquires.
• HMRC’s normal starting point is the person who held the relevant interest immediately before the scheme transactions began, but this is not an absolute rule.
• In multi-step arrangements, you should not look only at the final transfer document, because the immediate transferor may not be the right person to treat as V.
• The question is a factual tracing exercise and should be considered as part of the wider section 75A review.

Scroll down for the full analysis.

Who is “V” for SDLT section 75A purposes?

This page explains how HMRC says you identify “V” in section 75A of the SDLT rules. This matters because section 75A is an anti-avoidance provision for certain land transaction arrangements. To apply it, you need to work out who the legislation treats as the vendor side of the arrangement. HMRC’s point here is short, but it has practical importance: identifying “V” is a factual exercise, and getting it wrong can affect how the whole section 75A analysis is framed.

What this rule is about

Section 75A applies to certain arrangements involving land where, broadly, one person ends up with a chargeable interest and another person has disposed of that interest, or of an interest from which it is derived, through a series of scheme transactions. In that framework, the legislation uses the labels “V” and “P”.

“P” is the person who acquires the chargeable interest in question. “V” is the person on the disposal side. The issue on this page is how to identify “V”.

This is not just a labelling exercise. In section 75A cases, the legal and tax analysis often depends on tracing where the interest came from and who is properly treated as having disposed of it. In straightforward cases that may be obvious. In multi-step arrangements, it may not be.

What the official source says

HMRC’s manual says that “V” can be identified as the person who disposes of the chargeable interest acquired by “P”, or the person who disposes of the interest from which P’s acquired interest is derived.

HMRC also says that this will normally be the person who holds the interest immediately before the scheme transactions begin. But HMRC adds an important qualification: the answer depends on the facts of the particular case.

So the official position is not that “V” is always the person who was the legal owner at the start of the arrangements. Rather, that is the usual starting point, subject to the actual structure and effect of the transactions.

What this means in practice

In practice, you should begin by asking what chargeable interest P ends up with. Then ask where that interest came from.

Sometimes P acquires exactly the same interest that another person previously held. In that case, identifying V may be simple: V is likely to be the person who held and disposed of that interest.

In other cases, P may acquire an interest that is not transferred directly from one person to another, but is derived from an earlier interest. For example, the arrangements may involve intermediate steps, restructuring, or the creation and transfer of rights out of an existing interest. In that kind of case, HMRC’s wording indicates that V may still be the person whose earlier interest is the source of what P ultimately acquires.

The practical point is that section 75A looks through the mechanics of a multi-step arrangement to identify the relevant disposal side of the scheme. The person treated as V is therefore not chosen simply by looking at the last transfer document in isolation.

How to analyse it

A sensible way to analyse this point is:

• Identify P: who is the person that acquires the chargeable interest for section 75A purposes?
• Identify the chargeable interest P acquires: what exactly is the land interest that ends up with P?
• Trace the origin of that interest: was it directly disposed of to P, or is P’s interest derived from an earlier interest?
• Look at who held the relevant interest immediately before the scheme transactions: this is HMRC’s normal starting point for identifying V.
• Test that conclusion against the actual facts: does that person truly dispose of the interest acquired by P, or of the interest from which P’s interest is derived?
• Avoid focusing only on formal steps: in a multi-step arrangement, the immediate transferor in one document may not always be the correct person to identify as V if the interest is derived from an earlier holder’s interest.

This is a factual and legal tracing exercise. The answer may depend on the nature of the interest, the sequence of transactions, and whether P’s interest is best understood as a direct acquisition or as something carved out of, or derived from, another person’s interest.

Example

Illustration: A owns a freehold. A series of scheme transactions is then carried out, and at the end of those transactions P acquires a chargeable interest that comes out of that freehold interest. On HMRC’s approach, A will often be the starting point for identifying V, because A held the relevant interest immediately before the scheme transactions and P’s acquired interest is derived from A’s interest.

That said, the correct answer still depends on the precise facts. If the structure shows that another person is properly the one who disposed of the relevant interest acquired by P, the analysis may differ.

Why this can be difficult in practice

The difficulty is that section 75A arrangements are often not simple one-step sales. There may be several parties, several transfers, and changes in the form of the interest along the way.

Three points commonly create uncertainty:

• The difference between a direct disposal and an interest “derived” from an earlier interest. That can require careful analysis of what P actually acquires.
• The tension between legal form and overall scheme effect. The person who appears as transferor in the final step may not necessarily be the best fit for V if the relevant interest really originates elsewhere.
• HMRC’s use of the word “normally”. That shows there is no absolute rule. The person holding the interest immediately before the scheme transactions is the usual answer, not an automatic one.

Because of that, identifying V should be done as part of the wider section 75A analysis, not as a separate box-ticking step.

Key takeaways

• HMRC says V is the person who disposes of the chargeable interest acquired by P, or the interest from which P’s interest is derived.
• The usual starting point is the person who held the relevant interest immediately before the scheme transactions began.
• The correct answer is fact-sensitive and depends on the actual structure and effect of the arrangements.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Identifying V: Understanding Section 75A (1)(a) Chargeable Interest Disposal

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