SDLT group relief when the seller leaves the group
Seller leaves the group
HMRC says group relief does not fall away merely because a share sale takes the company that sold the land out of the group.
- Check which company left
- Check the ownership chain
- Check later control changes affecting the buyer
Scroll down for the full analysis.
Read the original guidance here:
SDLT group relief when the seller leaves the group
A company group may retain stamp duty land tax relief when the company selling the land subsequently leaves the group. This can seem a minor point. It may stop a substantial SDLT bill from reappearing after a share sale.
What this rule is about
Group relief may eliminate SDLT where land is transferred between companies within the same group. Normally, the companies must satisfy a 75% ownership test at the time of the transfer.
A further rule also applies. Where, after the transfer, the buyer and seller no longer belong to the same group because of a later change, the relief may sometimes be lost. This is called withdrawal of relief.
However, the direction of the change is important. Schedule 7 provides specific protection where the seller leaves the group.
What the official source says
HMRC’s manual includes an example in which one group company transfers land to another group company without payment. The parent company later sells shares in the company above the seller.
HMRC states that group relief remains available in that example. The buyer did not leave the seller’s group. Rather, the seller left the buyer’s group.
- A Ltd owns B Ltd and C Ltd.
- B Ltd owns D Ltd, which sells the land.
- While all four companies are in one group, D Ltd transfers the land to C Ltd.
- A later share sale causes B Ltd and D Ltd to leave that group.
- HMRC says that change alone does not withdraw the relief.
What this means in practice
Do not assume that a later sale of company shares will destroy an earlier SDLT group relief claim. Identify which company left the group, and why.
This is where errors can arise: selling shares in a company above the seller may remove the seller from the group without removing the buyer.
- Map the group before the land transfer.
- Map it again immediately after the share sale.
- Check whether the seller, rather than the buyer, left the group.
- Keep records that show the ownership chain.
How to analyse it
Begin with the original land transfer. Then trace the later corporate change forward. Labels such as “reorganisation” do not determine the answer.
- Did the companies meet the 75% group test on the transfer date?
- Did the company claim group relief in its SDLT return or an amendment?
- Did the buyer and seller later stop belonging to the same group?
- Did a share transaction cause the seller, or a company above it, to leave?
- Did the buyer later undergo a change of control?
- Were there arrangements that blocked relief from the start?
Example
HMRC’s example involves four companies. On 25 June 2004, freehold land worth £1,000,000 is transferred by D Ltd to C Ltd for no payment. A Ltd owns B Ltd and C Ltd, while B Ltd owns D Ltd.
On 7 July 2006, A Ltd sells B Ltd to an unconnected buyer. D Ltd departs with B Ltd. The land then has a market value of £1,750,000. HMRC says the original group relief remains because D Ltd, the seller, left the group.
Alter one fact and the answer may be different. If C Ltd, the buyer, left the group while still holding the land, the normal withdrawal rules may apply instead.
Why this can be difficult in practice
Corporate charts can appear straightforward until the rights attached to the shares are examined. The 75% test involves more than the number of shares held.
Timing also matters: where a planned sale, an option or another control arrangement exists when the transfer occurs, it may affect whether relief was available from the outset. Check this early.
- Owning 75% of shares may not settle every part of the group test.
- A sale of fewer than all shares can still take a company outside the group.
- The later value of the land does not change HMRC’s stated result in this example.
- A later change of control of the buyer needs separate checking.
Key takeaways
- SDLT group relief can survive when the seller leaves the group.
- The reason for the group break matters.
- Check the original ownership, later share sale and any control arrangements.
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 section 62 — how to claim schedule 7 relief
- FA 2003 Schedule 7 para 1 — when companies qualify for group relief
- FA 2003 Schedule 7 para 2 — control arrangements that block group relief; arrangements that can block group relief; commercial purpose and tax avoidance restrictions
- FA 2003 Schedule 7 para 3 — when group relief can be withdrawn; tax due after relief is withdrawn
- FA 2003 Schedule 7 para 4ZA — keeping relief when the seller leaves; later control changes affecting the buyer
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
- HMRC’s example assumes that the seller leaving the group is the only reason the buyer and seller stop belonging to the same group.
- The manual does not give all the facts needed to test the separate restrictions on group relief.
- Company ownership rights, planned share sales and control arrangements can change the result.
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.
- Group chart at the date of the land transfer and after the share sale
- Share registers and documents showing voting, profit and winding-up rights
- The land transfer documents and SDLT return
- Documents recording any planned sale, funding or control arrangements
- Evidence of who held the land when the group changed
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 SDLT group relief when the seller leaves the group [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 section 62 - how to claim schedule 7 relief https://www.legislation.gov.uk/ukpga/2003/14/section/62/2025-11-17 - FA 2003 Schedule 7 para 1 - when companies qualify for group relief https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/1/2025-11-17 - FA 2003 Schedule 7 para 2 - control arrangements that block group relief https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/2/2025-11-17 - FA 2003 Schedule 7 para 2 - arrangements that can block group relief https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/2/2025-11-17 - FA 2003 Schedule 7 para 2 - commercial purpose and tax avoidance restrictions 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 be withdrawn https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/3/2025-11-17 - FA 2003 Schedule 7 para 3 - tax due after relief is withdrawn https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/3/2025-11-17 - FA 2003 Schedule 7 para 4ZA - keeping relief when the seller leaves https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/4ZA/2025-11-17 - FA 2003 Schedule 7 para 4ZA - later control changes affecting the buyer https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/4ZA/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/sdltm23090g 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 - HMRC's example assumes that the seller leaving the group is the only reason the buyer and seller stop belonging to the same group. - The manual does not give all the facts needed to test the separate restrictions on group relief. - Company ownership rights, planned share sales and control arrangements can change the result. 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: SDLT group relief when the seller leaves the group
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