SDLT group relief when property moves into a partnership
SDLT group relief and partnerships
When a company moves property into a partnership, SDLT can depend on how much of the property value has effectively moved outside its share. A connected company in the same group may improve the result.
- Work out the SLP using the ownership and partnership shares.
- Paragraph 27A can include a same-group connected company.
- Check group relief restrictions before relying on the reduction.
Scroll down for the full analysis.
Read the original guidance here:
SDLT group relief when property moves into a partnership
Moving property from a company into a partnership can trigger stamp duty land tax, or SDLT. Another company in the same group can reduce the bill by becoming a partner. A connection between the companies alone does not decide the issue. Their shares and group position must fit a specific calculation.
What this rule is about
For SDLT, the law treats partnerships in a special way. Instead of looking only at the partnership as a separate business, the law looks through it to the people or companies behind it.
That matters when a company puts land into a partnership. The SDLT rules may base the charge on the part of the property value that the original owner has, in effect, given up to other partners.
The calculation uses a figure called the sum of the lower proportions, often shortened to SLP. The higher that figure is, the lower the taxable amount will be.
What the official source says
HMRC’s manual sets out an example in which B Ltd transfers property into a partnership while B Ltd and C Ltd become partners afterwards. They are also in the same corporate group.
First, B Ltd is a relevant owner because it owned all the property just before the transfer and was a partner just afterwards. Normally, B Ltd would be its own corresponding partner.
- B Ltd owned 100% of the property before the transfer.
- B Ltd and C Ltd each held a 50% partnership share afterwards.
- C Ltd had a connection to B Ltd and belonged to the same group.
- Paragraph 27A allows the calculation to treat C Ltd as a corresponding partner.
- The 100% ownership can therefore be split 50:50 between B Ltd and C Ltd.
- Each company’s lower proportion is 50%.
- Adding those figures gives an SLP of 100%.
- An SLP of 100% leaves no taxable amount for this transfer.
Without paragraph 27A, C Ltd would not count as B Ltd’s corresponding partner in this example, so B Ltd alone would produce an SLP of 50%. SDLT would then be worked out on 50% of the property’s market value.
Paragraph 27A reduces the charge to the amount that would have been due if the group company had counted as a corresponding partner. It is a form of group relief, but it is not a free-standing shortcut.
What this means in practice
Here is the practical point: a group company joining the partnership can preserve more of the original group’s economic share in the property. That can reduce the SDLT result.
What actually decides it? You must consider the ownership position immediately before transfer, the partnership shares immediately after it, and the corporate group position at that time. All three matter.
- Map the ownership of the property before the transfer.
- Record every partner immediately after the transfer.
- Check each partner’s share under the partnership agreement.
- Check whether a connected company is in the same group as the original owner.
- Work out the SLP with and without the paragraph 27A adjustment.
- Compare the two results before filing the SDLT return.
HMRC’s manual says the partnership must claim the paragraph 27A reduction as group relief in the land transaction return. A notifiable transaction requires a return, but the wider SDLT rules determine whether a transaction is notifiable in the first place. Check those rules.
How to analyse it
Start with the facts, not the label on the deal. Calling something a group reorganisation does not settle the SDLT position.
- Identify the property interest being transferred to the partnership.
- Identify every relevant owner just before the transfer.
- Find the corresponding partners after the transfer.
- For each original owner, divide its former property share between its corresponding partners.
- Compare each allocated share with that partner’s actual partnership share.
- Use the lower figure for each relevant partner.
- Add those lower figures to find the SLP.
- Test whether a same-group company can be included under paragraph 27A.
- Check the group relief restrictions and later withdrawal rules.
There is an important limit here. Paragraph 27A applies only where the connected company would have counted but for the normal rule limiting connected persons at this stage to individuals. The connected company and original owner must also be members of the same group.
Example
Suppose B Ltd owns all of a property and transfers it into a partnership. After the transfer, B Ltd and C Ltd each have a 50% partnership share. If C Ltd is connected to B Ltd and both are in the same group, the 100% former ownership can be split equally between them.
Each company’s lower proportion is then 50%. The SLP is 100%, so the example produces no taxable amount. Change one fact, however: if C Ltd cannot be included under paragraph 27A, B Ltd alone has a 50% lower proportion. The SLP falls to 50%, and SDLT is based on 50% of market value.
Why this can be difficult in practice
The arithmetic is not usually the hard part. The difficult work is deciding who counts at each stage, whether the group relief rules remain available, and whether later events could withdraw the relief. That work often needs careful checking.
You might think common ownership is enough. It is not. The statutory group test looks at the required level of ownership and rights to profits and assets.
- A group chart may hide different rights attached to shares.
- Partnership profit shares may differ from what people informally expect.
- Funding from outside the group can affect the relief restrictions.
- Planned changes in control can also matter.
- A later group departure can trigger a withdrawal of relief.
- The property value still needs reliable support, even where the final taxable amount is nil.
HMRC’s manual explains its view through one simple structure. It does not replace the legislation, and it cannot answer questions created by extra partners, trusts, debt, leases or linked steps.
Key takeaways
- SDLT on a partnership transfer can depend on the SLP calculation.
- A same-group connected company may increase the SLP under paragraph 27A.
- Group relief restrictions and withdrawal rules still need checking.
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 15 para 2 — how SDLT treats property held through partnerships
- FA 2003 Schedule 15 para 10 — taxable amount on transfers into a partnership
- FA 2003 Schedule 15 para 12 — how to calculate the lower proportions total
- FA 2003 Schedule 15 para 27 — how group relief rules apply to partnerships
- FA 2003 Schedule 15 para 27A — group relief for connected company partnership transfers
- FA 2003 Schedule 7 para 1 — when companies count as members of one group
- FA 2003 Schedule 7 para 2 — restrictions on group relief and tax avoidance arrangements
- FA 2003 Schedule 7 para 3 — when group relief can later be withdrawn
- FA 2003 section 76 — duty to submit a land transaction return
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
- The source gives a simplified example. Real arrangements may have more owners, partners, property interests, funding arrangements or different profit shares.
- The source does not give the transfer date. The statutory material supplied is current only to 17 November 2025, so transactions after that date need checking against current legislation.
- Whether companies are in the same group, and whether arrangements prevent relief, depends on the full corporate structure and transaction documents.
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.
- Documents showing who owned the property immediately before the transfer
- The partnership agreement and records of each partner’s share immediately after transfer
- A group chart and shareholding evidence for the companies involved
- Details of funding, planned ownership changes and related arrangements
- A valuation of the property interest transferred
- The SDLT return and the group relief claim details
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 property moves into a partnership [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 15 para 2 - how SDLT treats property held through partnerships https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/2/2025-11-17 - FA 2003 Schedule 15 para 10 - taxable amount on transfers into a partnership https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/10/2025-11-17 - FA 2003 Schedule 15 para 12 - how to calculate the lower proportions total https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/12/2025-11-17 - FA 2003 Schedule 15 para 27 - how group relief rules apply to partnerships https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/27/2025-11-17 - FA 2003 Schedule 15 para 27A - group relief for connected company partnership transfers https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/27A/2025-11-17 - FA 2003 Schedule 7 para 1 - when companies count as members of one group https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/1/2025-11-17 - FA 2003 Schedule 7 para 2 - restrictions on group relief and tax avoidance arrangements 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 section 76 - duty to submit a land transaction return https://www.legislation.gov.uk/ukpga/2003/14/section/76/2025-11-17 HMRC's guidance page on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm34430 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 - The source gives a simplified example. Real arrangements may have more owners, partners, property interests, funding arrangements or different profit shares. - The source does not give the transfer date. The statutory material supplied is current only to 17 November 2025, so transactions after that date need checking against current legislation. - Whether companies are in the same group, and whether arrangements prevent relief, depends on the full corporate structure and transaction documents. 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 property moves into a partnership
Search Land Tax Advice with Google
