Does keeping an easement create a stamp duty exchange?
Keeping rights when you sell land
HMRC says that keeping an easement, such as a right of way, does not alone make a land sale an SDLT exchange. A sale linked to a leaseback can be an exchange instead.
- A reservation is not automatically a separate transaction
- A leaseback can be part of the price for a sale
- The documents and wider bargain both matter
Scroll down for the full analysis.
Read the original guidance here:
Does keeping an easement create a stamp duty exchange?
Usually, no. Keeping a right over land when you sell it, such as a right of way, does not by itself create a stamp duty land tax exchange. A sale where you get a lease back can be very different.
What this rule is about
Stamp duty land tax, or SDLT, applies to purchases of interests in land in England and Northern Ireland. Those interests can include more than owning a whole property. They can include rights over land and leases.
The difficult question is often what the documents really do. Have you simply kept a right needed for land you still own? Was it one bargain? Did both sides exchange land rights?
That distinction sounds technical. It can change how SDLT is worked out.
What the official source says
HMRC’s manual says that a purchase can include creating, giving up, releasing or changing an interest in land that SDLT can cover. The Act gives the basic framework for that approach.
An exception or reservation in a transfer alone does not create a separate SDLT transaction. HMRC says no SDLT transaction arises. This includes reserving an easement, such as a right to pass over a track.
- Keeping a right of way does not alone make the deal an exchange.
- The same applies to another right reserved out of the land sold.
- Conveyancing language may describe a reservation as a re-grant.
- HMRC says that technical description does not settle the SDLT result.
- A sale made wholly or partly for a leaseback is different.
- HMRC says the sale and leaseback are separate transactions and an exchange.
What this means in practice
You might think that any right you keep means you have traded one land right for another. The document may only reserve a right from the transfer. HMRC says that view is wrong.
A leaseback needs closer attention. If you sell all or part of a site and receive a lease of all or part back, the lease may be part of what you receive for the sale.
- Read the transfer and lease together, not as isolated documents.
- Check whether the leaseback forms part of the price for the sale.
- Identify every right kept by the seller after completion.
- Separate a reserved easement from a newly granted lease.
- Do not assume a label in the documents decides the tax result.
How to analyse it
Start with what changed hands. A land transaction means acquiring an interest in land that SDLT can cover. The Act includes several ways in which that can happen.
Then ask the practical question: did the seller merely keep a right, or did the buyer grant something back in return for the sale?
- What land or rights did the buyer receive?
- What, if anything, did the seller keep?
- Was that retained right stated as an exception or reservation?
- Was a new lease granted back to the seller?
- Was the sale price reduced, increased or otherwise linked to that lease?
- Are the sale and the lease part of one bargain?
Where there is an exchange, the law treats each side as a separate transaction. Special rules can then affect the amount used for SDLT. Sometimes SDLT uses market value, not cash.
Example
Amir sells a field behind his workshop. The transfer says Amir keeps a right to use the access track across the field so he can reach his workshop. HMRC’s manual says that reservation alone does not make the sale an exchange.
Now change one fact. Amir sells the workshop site. The buyer leases part back to Amir. If that leaseback is part of the deal for the sale, HMRC says there are two separate transactions and an exchange.
Why this can be difficult in practice
Wording matters. So does the wider deal. A right called a reservation may still need careful review if side agreements show that both parties were giving land rights as part of the price.
This is the part people get wrong: a right kept from the land sold is not automatically the same thing as a new right granted by the buyer.
- Plans may not clearly show the route or area covered by a right.
- A leaseback may cover only part of the land sold.
- The sale contract may refer to separate arrangements not obvious from the transfer.
- A lease variation has its own statutory rules and does not always count.
- HMRC’s manual explains its view, but legislation remains the law.
Key takeaways
- A reserved easement does not by itself create an SDLT exchange.
- A sale and leaseback can create two separate SDLT transactions.
- Check the whole bargain, including plans, leases and side agreements.
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 43 — defines land transactions and certain acquisitions and disposals
- FA 2003 section 47 — treats land-for-land bargains as separate transactions
- FA 2003 section 48 — defines interests in land that SDLT can cover
- FA 2003 Schedule 4 para 5 — sets exchange consideration rules including market value
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
- Whether a document merely reserves a right or instead gives something back as part of the deal can depend on the drafting and the full commercial arrangement.
- The supplied statutory text is current only to 17 November 2025. The applicable law must be checked for a later transaction date.
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 signed transfer, lease and any agreement between the parties.
- Plans showing land sold, land retained and rights reserved.
- Details of any lease granted back to the seller.
- The price, rent and any other part of the bargain.
- The transaction’s effective date.
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 Does keeping an easement create a stamp duty exchange? [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 43 - defines land transactions and certain acquisitions and disposals https://www.legislation.gov.uk/ukpga/2003/14/section/43/2025-11-17 - FA 2003 section 47 - treats land-for-land bargains as separate transactions https://www.legislation.gov.uk/ukpga/2003/14/section/47/2025-11-17 - FA 2003 section 48 - defines interests in land that SDLT can cover https://www.legislation.gov.uk/ukpga/2003/14/section/48/2025-11-17 - FA 2003 Schedule 4 para 5 - sets exchange consideration rules including market value https://www.legislation.gov.uk/ukpga/2003/14/schedule/4/paragraph/5/2025-11-17 Guidance page from HMRC on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm00270 HOW I WANT YOU TO ANSWER 1. Work from the legislation above. Read it before answering. Guidance from HMRC is its 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 - Whether a document merely reserves a right or instead gives something back as part of the deal can depend on the drafting and the full commercial arrangement. - The supplied statutory text is current only to 17 November 2025. The applicable law must be checked for a later transaction date. 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: Does keeping an easement create a stamp duty exchange?
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