SDLT group relief when a company transfers property into an LLP
SDLT group relief and LLP transfers
A company transferring property into an LLP may obtain a reduced SDLT result where another LLP partner is a connected company in the same group.
- Apply the partnership calculation first.
- Check whether paragraph 27A applies.
- Test the adapted group-relief conditions and claim requirements.
Scroll down for the full analysis.
Read the original guidance here:
SDLT group relief when a company transfers property into an LLP
SDLT group relief when a company transfers property into an LLP
Stamp duty land tax, or SDLT, may be reduced when a company puts property into an LLP with another company from the same group. The key point is that the second company may count in the calculation, even though it is not the company that owned the property before the transfer.
What this rule is about
An LLP is a type of partnership. For SDLT, the law looks through the LLP and focuses on its partners. When land moves into an LLP, the partnership rules can still produce a tax charge even where the companies involved are connected and belong to the same group. Connection alone does not settle the result.
The calculation starts with ownership. It compares who owned the property before the move with who has a share in the LLP afterwards, thereby measuring how much of the property’s value has, in effect, moved to people who did not previously own it. That shift drives the result.
This is where group relief can matter. A company in the same corporate group as the original owner may help reduce the SDLT result.
What the official source says
HMRC’s manual gives an example. B Ltd owns all the property before transferring it to an LLP. Afterwards, B Ltd and C Ltd each have a 50% share in the LLP.
Normally, the calculation identifies the original owner and then its corresponding partners. A corresponding partner is a partner who qualifies under the steps in the partnership rules.
- B Ltd is the original owner because it owned the whole property before the transfer.
- B Ltd is a corresponding partner because it remains a partner afterwards.
- C Ltd is connected with B Ltd and is in the same group.
- C Ltd would have been a corresponding partner but for the rule that normally limits this part of the test to connected individuals.
- Paragraph 27A treats the calculation as though C Ltd were also a corresponding partner.
- B Ltd’s former 100% ownership can then be split 50:50 between B Ltd and C Ltd.
- Each company’s 50% allocation matches its 50% share in the LLP.
- The total lower proportion is therefore 100%.
Under the statutory formula, the amount used for SDLT is the market value of the property interest multiplied by the sum of lower proportions. A total of 100% produces no amount for that calculation.
Without paragraph 27A, C Ltd would not count. The total lower proportion would be 50%. HMRC’s example says the SDLT calculation would then use 50% of the market value.
What this means in practice
You might assume that group companies can move property between themselves without SDLT. That is too simple when an LLP is involved. The partnership rules still apply first.
Paragraph 27A does not make every transfer into an LLP tax-free. It reduces the charge to what it would have been if the qualifying group company had counted as a corresponding partner.
- Check who owned the property immediately before the transfer.
- Check which companies are LLP partners immediately after it.
- Check the percentage share each partner has after the transfer.
- Check whether the companies are in the same group at the relevant time.
- Use the actual corporate ownership rights, not just a group chart label.
- Consider whether other planned transactions affect the result.
The group test is more than common ownership in everyday language. The legislation uses a 75% group test based on share capital, rights to profits, and rights to assets on a winding-up.
HMRC’s manual says that, where the transaction is notifiable and the LLP seeks the paragraph 27A reduction, it must claim that reduction as group relief in its land transaction return. A return is required for a notifiable transaction.
How to analyse it
Begin with the partnership rules. An LLP’s legal status, or the companies’ shared ownership, does not settle the SDLT answer.
- Identify the property interest being transferred and its market value.
- Confirm that the transfer is into a partnership, including an LLP.
- Identify every original owner immediately before the transfer.
- Identify the LLP partners immediately after the transfer.
- Apply the steps for corresponding partners and lower proportions.
- Work out the result without paragraph 27A first.
- Ask whether a company would qualify but for the connected-individual limit.
- Check whether that company and the original owner are in the same group.
- Rework the lower proportions on the paragraph 27A basis.
- Test the restrictions and possible later withdrawal of group relief.
- Record the relief claim in the land transaction return where the transaction is notifiable.
This order matters. A 50:50 LLP split does not automatically mean a 50% reduction. The result depends on the old ownership, the new partnership shares, and the group conditions.
Example
B Ltd owns 100% of a property. It transfers the property into an LLP. Immediately afterwards, B Ltd and C Ltd each have a 50% share in the LLP.
First, B Ltd is the original owner. B Ltd is also a corresponding partner. If C Ltd did not count, the calculation would produce a 50% total lower proportion.
Now add one fact: C Ltd is connected with B Ltd and both are in the same group. If C Ltd would otherwise qualify as a corresponding partner, paragraph 27A allows the calculation to include it. B Ltd’s 100% former ownership is split equally between the two companies. The total lower proportion becomes 100%.
In HMRC’s example, including C Ltd changes the SDLT amount used in the calculation from 50% of market value to nil, but only if the group-relief conditions, as modified for partnerships, are met. Those conditions are essential.
Why this can be difficult in practice
This is a fact-heavy rule. Small differences in the LLP agreement or company ownership can change the answer. The paperwork must show the position immediately before and immediately after the transfer.
Most people get one point wrong: connection and group membership are separate ideas. A company may be connected with the original owner but fail the required same-group test.
- A group chart may not show all rights to profits or assets.
- The LLP profit-sharing ratio may differ from an assumed ownership split.
- A company must be a partner at the relevant time.
- The allocation of the original owner’s former share affects the result.
- Arrangements for a later sale or change of control may restrict relief.
- A later group change can trigger withdrawal of relief in some cases.
- The statutory group-relief restrictions apply, but paragraph 27A modifies some of them.
- HMRC’s manual example is guidance, not a substitute for applying the legislation to the documents.
Key takeaways
- SDLT group relief can reduce tax on a property transfer into an LLP.
- A connected group company may count in the calculation under paragraph 27A.
- The LLP shares, group structure, and transaction documents decide the result.
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 1 — includes limited liability partnerships in partnership rules
- FA 2003 Schedule 15 para 2 — treats partnership land as held by its partners
- FA 2003 Schedule 15 para 10 — sets deemed payment for land transfers into partnerships
- FA 2003 Schedule 15 para 12 — calculates the sum of lower proportions
- FA 2003 Schedule 15 para 27 — adapts group relief for partnership land transfers
- FA 2003 Schedule 15 para 27A — reduces tax where group companies join the partnership
- FA 2003 Schedule 7 para 1 — defines companies in the same corporate group
- FA 2003 Schedule 7 para 2 — restricts group relief for certain arrangements
- FA 2003 Schedule 7 para 3 — withdraws group relief after certain group changes
- FA 2003 section 76 — requires a return for a notifiable land transaction
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 outcome depends on the LLP agreement, the ownership of the land before transfer, each partner’s share after transfer, and the corporate ownership chain.
- The source does not give the transaction date, so the legislation in force on that date must be checked.
- HMRC’s manual is guidance on HMRC’s view, not the law itself.
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.
- The transfer documents and the land title details
- The LLP agreement and records of each partner’s profit share
- The group structure immediately before and after the transfer
- Evidence of the market value of the land interest
- Details of any planned sale, refinancing, or change in control
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 a company transfers property into an LLP [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 1 - includes limited liability partnerships in partnership rules https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/1/2025-11-17 - FA 2003 Schedule 15 para 2 - treats partnership land as held by its partners https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/2/2025-11-17 - FA 2003 Schedule 15 para 10 - sets deemed payment for land transfers into partnerships https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/10/2025-11-17 - FA 2003 Schedule 15 para 12 - calculates the sum of lower proportions https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/12/2025-11-17 - FA 2003 Schedule 15 para 27 - adapts group relief for partnership land transfers https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/27/2025-11-17 - FA 2003 Schedule 15 para 27A - reduces tax where group companies join the partnership https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/27A/2025-11-17 - FA 2003 Schedule 7 para 1 - defines companies in the same corporate group https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/1/2025-11-17 - FA 2003 Schedule 7 para 2 - restricts group relief for certain arrangements https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/2/2025-11-17 - FA 2003 Schedule 7 para 3 - withdraws group relief after certain group changes https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/3/2025-11-17 - FA 2003 section 76 - requires a return for a notifiable land transaction 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/sdltm34470 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 outcome depends on the LLP agreement, the ownership of the land before transfer, each partner's share after transfer, and the corporate ownership chain. - The source does not give the transaction date, so the legislation in force on that date must be checked. - HMRC's manual is guidance on HMRC's view, not the law itself. 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 a company transfers property into an LLP
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