Group, reconstruction and company purchase relief for stamp duty
At a glance
HMRC’s page is an index to its guidance on relief for corporate land transfers. It is not an eligibility decision.
- Schedule 7 contains the legal rules.
- Group and reconstruction relief can fully exempt a qualifying transfer.
- A later ownership change can withdraw relief.
Scroll down for the full analysis.
Read the original guidance here:
Group, reconstruction and company purchase relief for stamp duty
Group, reconstruction and company purchase relief for stamp duty
These stamp duty reliefs can reduce or remove tax when companies move land within a group or reorganise a business. But this HMRC page is only a contents list. It points to detailed guidance; it does not say that any particular deal qualifies.
What this rule is about
Most people think stamp duty only matters when a home is bought. Companies can also pay SDLT when land changes hands. Schedule 7 to the Finance Act 2003 contains special rules for certain corporate transfers.
The idea is simple: where a transfer is a genuine internal move or forms part of a business reorganisation, it may not be treated like an ordinary sale. The conditions are not simple. A later sale or change in control can bring the tax back.
That is the part people miss.
What the official source says
HMRC’s page lists the parts of its internal SDLT manual that deal with three related reliefs and their detailed guidance. HMRC’s manual is guidance, not law. The legal rules sit in Schedule 7.
- Group relief covers transfers between companies that are members of the same qualifying group.
- The manual has sections on the definitions and restrictions that apply to group relief.
- It has separate sections on arrangements, including planned changes in who controls a company.
- It covers when group relief may be withdrawn after the transfer.
- It includes exceptions where a change does not withdraw group relief.
- It covers recovery of unpaid tax from some other group companies or controlling directors.
- Reconstruction relief covers qualifying company reorganisations.
- Company purchase relief applies to a qualifying transfer connected with one company buying all or part of another company’s business as part of the transaction.
- The manual covers later changes in control that can withdraw either of those reliefs.
- It also covers special rules where shares later move outside the relevant group.
Under the legislation, group relief can fully exempt a qualifying transfer. Reconstruction relief can also fully exempt a qualifying transfer. By contrast, company purchase relief limits SDLT, where the qualifying conditions are met, to 0.5% of the amount paid for the land transfer. It does not fully exempt the transfer.
What this means in practice
A company cannot safely rely on a label such as “internal transfer” or “reorganisation” when the ownership structure, deal documents and wider plan must all be considered. Labels alone are not enough.
In particular, the law looks beyond what happens on completion day. A planned sale of the company receiving the land may affect relief, even if that sale happens later.
- Check whether both companies meet the required group ownership test on the effective date.
- Check whether anyone outside the group provides or receives value as part of the arrangements.
- Check whether the deal has genuine commercial reasons.
- Check whether avoiding tax is a main purpose of the wider arrangements.
- Keep watching the group structure for three years after the transfer.
- Do not assume that moving land through several companies avoids the withdrawal rules.
Some changes will not withdraw relief. For example, Schedule 7 includes limited protections for certain reorganisations and share transfers. Those protections have their own conditions.
How to analyse it
Start with the actual deal, not the name given to it. Then work through the legal route that fits the facts.
- Identify the land transfer and its effective date.
- Map the companies and their ownership percentages at that date.
- Decide whether the claim is for group relief, reconstruction relief or company purchase relief.
- Read every condition for that relief, including the rules on shares and commercial purpose.
- List all related agreements, understandings and planned transactions.
- Check whether there will be a sale, winding-up or change in control within three years.
- Test whether a stated exception to withdrawal applies.
- Keep records showing why the transaction was commercially driven.
What counts as an arrangement? It is wider than a signed contract. The legislation includes a scheme, agreement or understanding, whether or not it can be enforced in court.
Example
Imagine that Oak Ltd transfers a warehouse to its 100%-owned subsidiary, Birch Ltd, as part of a genuine internal reorganisation. If the group conditions and restrictions are met, group relief may remove the SDLT charge on that transfer.
Now change one fact. Before the transfer, the group has agreed a plan for an outside buyer to take control of Birch Ltd as part of the arrangements surrounding the proposed transfer. That plan may stop group relief being available or may lead to withdrawal rules. The result turns on the full arrangements, not just the ownership chart on the transfer date.
For a different type of deal, a company buys a qualifying business and takes its land as part of that deal. If all conditions for company purchase relief are met and the amount paid for the land transfer is £2 million, the reduced SDLT amount is £10,000: 0.5% of £2 million.
Why this can be difficult in practice
These rules often involve several companies, share classes and documents signed at different times. A diagram that looks clear can hide rights that change who has control.
You might think only a completed share sale matters. It does not. A prior plan, option, funding agreement or informal understanding may matter too.
- Ownership of ordinary shares is only one part of the group test.
- Rights to profits and assets on a winding-up can also matter.
- A commercial reason does not by itself answer every anti-avoidance question.
- Relief can be withdrawn only in defined circumstances, so the exact later event matters.
- Where relief is withdrawn, the calculation can use market value rather than the original transfer price.
- If tax remains unpaid, the legislation can allow HMRC to pursue specified connected people or companies.
The HMRC contents page is useful as a map. For a live transaction, the relevant manual section and the exact Schedule 7 paragraph must both be read.
Key takeaways
- These are corporate stamp duty reliefs, not automatic exemptions.
- Planned ownership changes can be as important as the land transfer itself.
- Keep evidence of the group structure, commercial purpose and future plans.
Technical analysis
For advisers, and for anyone who wants to check the law behind this page. You do not need this section to understand the guidance above.
Legislation
- FA 2003 Schedule 7 para 1 — when companies in one group can claim relief
- FA 2003 Schedule 7 para 2 — arrangements that can prevent group relief
- FA 2003 Schedule 7 para 3 — when group relief can later be withdrawn
- FA 2003 Schedule 7 para 4 — limited cases where group relief stays in place
- FA 2003 Schedule 7 para 4ZA — protection where the selling company leaves the group
- FA 2003 Schedule 7 para 4A — withdrawal rules for linked earlier transfers
- FA 2003 Schedule 7 para 5 — who else may have to pay withdrawn group relief
- FA 2003 Schedule 7 para 6 — notices to recover unpaid withdrawn group relief
- FA 2003 Schedule 7 para 7 — when a company reconstruction can be exempt
- FA 2003 Schedule 7 para 8 — when a qualifying business purchase gets the reduced rate
- FA 2003 Schedule 7 para 9 — when reconstruction or purchase relief can be withdrawn
- FA 2003 Schedule 7 para 10 — limited exceptions to withdrawal after control changes
- FA 2003 Schedule 7 para 11 — later share transfers that can revive the tax charge
- FA 2003 Schedule 7 para 12 — who else may have to pay withdrawn relief
- FA 2003 Schedule 7 para 13 — notice rules for recovery of unpaid tax
Official guidance
The pages below are HMRC’s guidance. Guidance is not law. It sets out how HMRC reads the legislation, and it is not binding on you, on a tribunal or on a court. Where guidance and the legislation differ, the legislation wins. HMRC can also change or withdraw guidance, and it may not cover your facts.
Where this is not settled
- This contents page does not give enough facts to decide whether a particular corporate restructure qualifies.
- The meaning and effect of planned ownership changes can be highly fact-sensitive.
- The relevant transaction date must be checked against the version of the legislation then in force.
Evidence you would need
This kind of case is decided on the facts of the individual property. These are the records that usually settle it, and the ones an adviser would ask you for.
- A group chart showing ownership and voting rights before and after the transfer
- Share purchase, reconstruction and funding documents
- Board papers explaining the commercial reason for the deal
- Details of any planned sale, refinancing or change of control
- Land transfer documents and a record of the property’s market value
Explore this with an AI
Readers often want to test their own situation. Copy the prompt below into ChatGPT, Claude or Gemini. It hands the model the actual legislation for this page rather than letting it answer from memory, and tells it to be explicit about what is uncertain. What comes back is information, not advice – check it against the links above.
I am researching UK Stamp Duty Land Tax (SDLT), which applies in England and Northern Ireland. MY QUESTION Group, reconstruction and company purchase relief for stamp duty [Replace this with your own situation: what you are buying, the price, the dates, who the buyer is, and what you plan to do with the property.] THE LAW THIS TURNS ON - FA 2003 Schedule 7 para 1 - when companies in one group can claim relief https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/1/2025-11-17 - FA 2003 Schedule 7 para 2 - arrangements that can prevent group relief https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/2/2025-11-17 - FA 2003 Schedule 7 para 3 - when group relief can later be withdrawn https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/3/2025-11-17 - FA 2003 Schedule 7 para 4 - limited cases where group relief stays in place https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/4/2025-11-17 - FA 2003 Schedule 7 para 4ZA - protection where the selling company leaves the group https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/4ZA/2025-11-17 - FA 2003 Schedule 7 para 4A - withdrawal rules for linked earlier transfers https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/4A/2025-11-17 - FA 2003 Schedule 7 para 5 - who else may have to pay withdrawn group relief https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/5/2025-11-17 - FA 2003 Schedule 7 para 6 - notices to recover unpaid withdrawn group relief https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/6/2025-11-17 - FA 2003 Schedule 7 para 7 - when a company reconstruction can be exempt https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/7/2025-11-17 - FA 2003 Schedule 7 para 8 - when a qualifying business purchase gets the reduced rate https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/8/2025-11-17 - FA 2003 Schedule 7 para 9 - when reconstruction or purchase relief can be withdrawn https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/9/2025-11-17 - FA 2003 Schedule 7 para 10 - limited exceptions to withdrawal after control changes https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/10/2025-11-17 - FA 2003 Schedule 7 para 11 - later share transfers that can revive the tax charge https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/11/2025-11-17 - FA 2003 Schedule 7 para 12 - who else may have to pay withdrawn relief https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/12/2025-11-17 - FA 2003 Schedule 7 para 13 - notice rules for recovery of unpaid tax https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/13/2025-11-17 HMRC's guidance page on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm23000 HOW I WANT YOU TO ANSWER 1. Work from the legislation above. Read it before answering. HMRC guidance is HMRC's view of the law, not the law, and does not bind a tribunal or a court. 2. Tell me what the rule actually requires, in plain English. 3. Tell me which facts decide the answer, and which facts would change it. 4. Tell me what evidence I would need to support the position. 5. Be explicit about anything unsettled or fact-sensitive. Do not guess. 6. Your training data has a cutoff and SDLT rates and reliefs change at fiscal events. Say so if you are not sure the law is current. POINTS ALREADY KNOWN TO BE UNCERTAIN ON THIS TOPIC - This contents page does not give enough facts to decide whether a particular corporate restructure qualifies. - The meaning and effect of planned ownership changes can be highly fact-sensitive. - The relevant transaction date must be checked against the version of the legislation then in force. Do not give me a conclusion you cannot support from the provisions above.
Legislation links show Finance Act 2003 as it stood on 2025-11-17. The law may have changed since, and the rules that apply are those in force on the date of your transaction. The official guidance this page is based on is here.
This page was last updated on 1 September 2026
Useful article? You may find it helpful to read the original guidance here: Group, reconstruction and company purchase relief for stamp duty
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