Series of Land Assignment Scenarios: Consideration Calculations and Chargeable Amounts Explained

SDLT sub-sale relief where rights are assigned more than once

Where a land contract is assigned down a chain before completion, SDLT is usually charged on the final buyer who actually takes the land. The taxable amount is generally based on what that final buyer pays for the last assignment and to the original seller on completion, but connected-party rules can increase that figure under a minimum consideration rule.

• Sub-sale relief is designed to stop the same land deal being fully taxed more than once when rights are assigned before completion.
• In HMRC’s example, A sells to B for £1 million, B assigns to C, C assigns to D, and D completes by paying A £900,000 and taking the land.
• If D pays C £150,000 for the final assignment, D’s chargeable consideration is £1,050,000; if D pays C £50,000, it is £950,000.
• Earlier parties can still be treated as involved in notional or additional land transactions, but HMRC says relief may be available for B and C.
• If the final assignment is for little or nothing between connected parties, the minimum consideration rules may substitute a higher taxable amount, as in HMRC’s example where D is charged on £950,000 instead of £900,000.
• In practice, you should trace the original contract, each assignment, who finally completes, what the final buyer pays, and whether connected-party rules alter the result.

Scroll down for the full analysis.

SDLT sub-sale relief: series of assignments of rights

This page explains how SDLT can apply where a buyer under a land contract assigns its rights more than once before completion. The HMRC example deals with a chain of assignments and shows who is taxed, what amount is taxed, and how the minimum consideration rules can increase the SDLT charge where connected parties are involved.

What this rule is about

The source material is about sub-sale relief and assignments of rights. In broad terms, this area applies where the original buyer under a contract does not complete the purchase itself. Instead, it passes its contractual rights on to another person, and that person may pass them on again before the land is finally transferred.

Without special rules, the same land deal could be taxed more than once. The legislation therefore treats the final person who actually takes the land as the main chargeable purchaser, while giving relief for earlier steps in the chain if the statutory conditions are met.

But the legislation does not simply ignore the earlier assignments. It creates a set of notional and additional land transactions to work out how the rules apply. In some cases, especially where connected parties are involved, a minimum consideration rule can prevent the final SDLT charge from being reduced too far.

What the official source says

The HMRC example starts with a contract between A and B for land at £1 million. B pays A a £100,000 deposit. B then assigns its rights to C, and C assigns its rights to D. D completes the acquisition by paying A £900,000 and taking the land.

HMRC says D is chargeable under paragraph 4 as the transferee. D’s chargeable consideration is made up of:

• the amount D gives for the assignment to D, and
• the amount D pays to A on completion.

In the first scenario, D pays C £150,000 for the assignment and pays A £900,000 on completion. HMRC therefore treats D’s chargeable consideration as £1,050,000.

HMRC then explains how paragraph 5 applies to the earlier parties:

• B is treated as purchaser under a notional land transaction.
• C is treated as purchaser under an additional land transaction.
• Each of those transactions has chargeable consideration of £1 million in the example.
• B and C can claim relief.

In the second scenario, D pays C only £50,000 for the final assignment, while still paying A £900,000 on completion. HMRC says D is still chargeable under paragraph 4, but now on £950,000.

HMRC says the position of B and C remains the same as in the first scenario.

In the third scenario, B assigns to C for £50,000, C assigns to D for nothing, and C and D are connected. D still pays A £900,000 on completion. HMRC says D’s basic paragraph 4 consideration is £900,000, but the minimum consideration rule applies. That increases D’s chargeable consideration to £950,000.

HMRC identifies two minimum amounts in that scenario. On the facts given, both minimum amounts are £950,000, so that is the amount on which D is charged.

What this means in practice

The practical point is that in a chain of assignments, SDLT for the final buyer is not always based on the original contract price between the first seller and first buyer. Instead, the final buyer’s chargeable consideration is generally based on what that final buyer gives up in order to get the land.

That usually includes two elements:

• what the final buyer pays for the last assignment of rights, and
• what the final buyer pays to the original seller on completion.

This means the SDLT amount for the final buyer can be more than, equal to, or less than the original contract price, depending on the amounts paid in the chain.

The examples show this clearly:

• If D pays more to C for the assignment, D’s SDLT consideration increases.
• If D pays less to C for the assignment, D’s SDLT consideration decreases.
• If D pays nothing to a connected party, the legislation may substitute a higher minimum figure.

The earlier parties in the chain are not simply ignored. The legislation reconstructs their positions through a notional land transaction and an additional land transaction. HMRC’s example says those earlier parties can claim relief. The practical effect is to prevent multiple full SDLT charges arising across the chain where the sub-sale rules apply properly.

How to analyse it

When looking at a series of assignments of rights, it helps to work through the transaction in stages.

• First, identify the original land contract: who agreed to buy the land from the seller, and for what price?
• Second, identify each assignment of rights in order: who assigned to whom, and what was paid?
• Third, identify who actually completed and took the land transfer from the original seller.
• Fourth, work out what the final transferee gave as consideration. This will usually include the payment for the final assignment plus the completion money paid to the seller.
• Fifth, consider whether paragraph 5 creates earlier notional or additional land transactions for intermediate parties.
• Sixth, check whether relief is available for those earlier transactions.
• Seventh, if any party in the chain is connected with the final transferee, consider whether the minimum consideration rules override the lower figure that would otherwise apply.

The source material also shows an important point about connected-party cases. The minimum amount is not necessarily the original full contract price. In HMRC’s third scenario, the minimum amount was based on the amounts given by C and D, not on the full £1 million contract between A and B.

So the right question is not simply, “What was the original purchase price?” The better question is, “What amount does the legislation require to be brought into account for this particular transferee, given the chain of assignments and any connected-party rules?”

Example

Illustration based on the HMRC scenarios:

A agrees to sell land to B for £1 million. B pays a £100,000 deposit. B then assigns the contract to C. C later assigns it to D. D completes the purchase with A and pays A £900,000.

If D pays C £150,000 for the assignment, HMRC treats D’s chargeable consideration as £1,050,000.

If D pays C only £50,000, HMRC treats D’s chargeable consideration as £950,000.

If D pays C nothing, but C and D are connected, HMRC says D is not taxed simply on the £900,000 paid to A. The minimum consideration rule increases the figure to £950,000.

Why this can be difficult in practice

This area can be hard to apply because there are several moving parts.

First, the legislation distinguishes between the final transferee’s actual land transaction and earlier notional or additional transactions. That structure is technical and can be easy to misread.

Second, in a chain of assignments, the relevant amount for the final buyer is not always the original contract price. A person might assume that SDLT must always be based on the headline price agreed at the start, but the example shows that this is not necessarily right.

Third, connected-party cases need extra care. HMRC’s example shows that where the final assignment is for nil between connected parties, the minimum consideration rule may raise the taxable amount. But the way that minimum is calculated depends on the statutory machinery in paragraphs 12 to 14. It is not just a broad anti-avoidance judgment; it is a specific legislative calculation.

Fourth, the source material says the position of B and C is “the same” or “similar” in different scenarios, but in real cases the precise relief position will depend on the exact facts and on whether the statutory conditions are fully met.

Key takeaways

• In a series of assignments, the final transferee is generally charged by reference to what that transferee gives for the land, including the final assignment payment and the completion payment to the seller.
• Earlier parties may still have notional or additional land transactions, but HMRC’s example says relief can be claimed for them.
• If connected parties are involved, a minimum consideration rule can increase the final transferee’s SDLT charge above the amount that would otherwise result from the final assignment terms alone.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Series of Land Assignment Scenarios: Consideration Calculations and Chargeable Amounts Explained

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