Understanding Group Relief for SDLT: Transfer Between E Ltd and B Ltd

SDLT Group Relief and Transparent Partnerships in Land Transfers

A land transfer between companies can still qualify for SDLT group relief even if one company in the ownership chain is held through a partnership that is transparent for UK tax purposes. The key question is whether, by looking through that transparent entity, the companies still meet the SDLT group rules, including the 75% beneficial ownership test and the other conditions in Schedule 7.

• Schedule 15 partnership rules do not apply unless the land transfer is actually made to or from a partnership.
• If the transfer is simply from one company to another, the correct starting point is the SDLT group relief rules in Schedule 7.
• Where an EP or ELP is transparent for UK tax purposes, you look through it to identify the beneficial owners of the shares.
• This means a transparent partnership in the ownership chain does not automatically prevent companies from being in the same SDLT group.
• If the 75% beneficial ownership test and the other statutory conditions are met, group relief can remove an SDLT market value charge on an intra-group transfer.
• In the example given, E Ltd and B Ltd are treated as being in the same group because B Ltd and C Ltd each beneficially own 50% of E Ltd and are both wholly owned by A Ltd.

Scroll down for the full analysis.

When group relief can apply to a land transfer involving a transparent partnership

This page explains an SDLT point that can be easy to miss: a land transfer may still qualify for group relief even if one of the companies in the ownership chain is held through an entity that is transparent for UK tax purposes. The practical question is whether, looking through that transparent entity, the companies are still in the same SDLT group and satisfy the 75% beneficial ownership test.

What this rule is about

Group relief is an SDLT relief for certain transfers of land between companies in the same group. If it applies, it can relieve the SDLT charge that would otherwise arise, including a market value charge in cases where the legislation requires the transaction to be taxed by reference to market value rather than actual consideration.

The source material deals with a case where land is transferred from E Ltd to B Ltd. The key issue is whether E Ltd and B Ltd are members of the same group for SDLT purposes when E Ltd is owned through an EP or ELP that is treated as transparent under UK tax law.

The page also makes clear that the partnership rules in Schedule 15 are not engaged unless the transfer is to or from a partnership. If the transfer is simply between companies, you do not start with the partnership transfer rules just because a transparent partnership appears somewhere in the ownership structure.

What the official source says

The official material says that Schedule 15 does not apply in this example because the land transfer is not made by a partnership and is not made to a partnership. The transfer is from one company to another company.

That means the analysis moves straight to the group relief rules in Schedule 7.

For SDLT group relief to apply, the transfer must be between group companies. The source highlights two points in particular:

• the relevant entities must be companies, meaning bodies corporate; and
• the 75% beneficial ownership test must be satisfied.

The source then says that because an EP or ELP is transparent under UK taxation laws, B Ltd and C Ltd are each treated as owning 50% of the issued share capital of E Ltd. Since B Ltd and C Ltd are both 100% subsidiaries of A Ltd, the companies form an SDLT group. If the other requirements of paragraph 2 of Schedule 7 are met, group relief applies and relieves any market value charge under section 53 FA 2003.

What this means in practice

The practical effect is that a transparent partnership in the ownership chain does not necessarily break SDLT group relief.

If UK tax law treats the partnership as transparent, you look through it to identify who beneficially owns the shares. In the example, that means B Ltd and C Ltd are each treated as owning half of E Ltd directly for SDLT group purposes.

Because B Ltd and C Ltd are both wholly owned by A Ltd, E Ltd and B Ltd are within the same wider group. On that basis, the transfer from E Ltd to B Ltd can qualify for group relief, assuming the detailed statutory conditions are met.

This matters because some transactions between connected companies are charged on market value rather than the amount actually paid. Group relief can remove that charge if the statutory conditions are satisfied. Intra-group transfers that might otherwise produce a substantial SDLT bill may therefore be relieved.

The source does not say that relief is automatic. It says relief applies if the requirements of Schedule 7 paragraph 2 are met. So the ownership analysis is only one part of the test, even though it is the main issue discussed on this page.

How to analyse it

A sensible way to approach this kind of case is:

• Identify the actual transfer. Is the land being transferred from a partnership or to a partnership, or is it simply a transfer between companies?
• If the transfer is not to or from a partnership, do not assume the partnership transfer rules in Schedule 15 apply just because a partnership appears in the background ownership structure.
• Check whether the transferor and transferee are companies for SDLT purposes, meaning bodies corporate.
• Work out the ownership chain for group relief purposes. If an EP or ELP is transparent under UK tax law, look through it to the persons or companies that beneficially own the shares.
• Apply the 75% beneficial ownership test required for SDLT group relief.
• Then check the other conditions in Schedule 7 paragraph 2 before concluding that relief is available.
• If there is a market value rule in point, consider whether group relief would eliminate that charge.

The key analytical point from the source is that tax transparency affects how share ownership is identified. It does not convert a company-to-company transfer into a partnership transfer.

Example

Illustration: E Ltd owns land. Its shares are held through an ELP that is transparent for UK tax purposes. Looking through the ELP, B Ltd and C Ltd each beneficially own 50% of E Ltd. B Ltd and C Ltd are both wholly owned by A Ltd. E Ltd transfers the land to B Ltd.

On the approach in the source material, this is not a transfer from or to a partnership, so the partnership rules in Schedule 15 do not apply. Instead, you consider Schedule 7 group relief. Looking through the transparent ELP, E Ltd and B Ltd are in the same SDLT group. If the other statutory conditions are met, group relief can apply and relieve any market value SDLT charge.

Why this can be difficult in practice

The main difficulty is distinguishing between two different issues:

• whether the transaction itself is a partnership transaction; and
• whether a partnership or similar entity affects the ownership analysis for group relief.

Readers sometimes assume that if a partnership appears anywhere in the facts, the partnership SDLT rules must apply. The source shows that this is not right. What matters first is who is actually transferring the land and to whom.

A second difficulty is the use of the term transparent. The source states that an EP or ELP is transparent under UK taxation laws, and on that basis beneficial ownership of E Ltd is attributed to B Ltd and C Ltd. In practice, the precise legal and tax characterisation of an entity can matter a great deal. The transparency point is being used here for the ownership test in this specific SDLT context.

A third difficulty is that the source focuses on one gateway issue only. Even if the companies are in the same group, group relief still depends on the full statutory conditions in Schedule 7 paragraph 2. The page does not set out those conditions in detail, so it should not be read as saying that common ownership alone is enough.

Key takeaways

• If land is transferred between companies, Schedule 15 partnership rules do not apply unless the transfer is actually from or to a partnership.
• For SDLT group relief, a transparent EP or ELP may be looked through when deciding who beneficially owns the shares.
• If the 75% beneficial ownership test and the other Schedule 7 conditions are met, group relief can relieve a market value SDLT charge on an intra-group transfer.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Understanding Group Relief for SDLT: Transfer Between E Ltd and B Ltd

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