Exemptions from Stamp Duty Land Tax on Ending Marriages or Civil Partnerships

SDLT exemption on property transfers after divorce, dissolution or separation

Some transfers of property between spouses or civil partners are exempt from Stamp Duty Land Tax when they are made because the relationship is ending. The exemption is narrow: it usually applies only where the transfer is between the couple themselves and is made under a court order, a relevant agreement, or formal separation arrangements.

• The exemption applies only to transfers between the spouses or civil partners involved.
• The transfer must be connected with divorce, dissolution, annulment, judicial separation, or a separation order.
• A transfer may qualify if it is made under a qualifying court order or an agreement made in contemplation of, or in connection with, the relationship ending.
• If any third party is involved in the land transaction, this exemption will not apply on the basis described.
• Calling something a divorce settlement is not enough; the legal transaction must meet the statutory conditions for the exemption.

Scroll down for the full analysis.

SDLT exemption for property transfers on divorce, dissolution or separation

Some land transfers between spouses or civil partners are exempt from Stamp Duty Land Tax when they are made because the relationship is ending. This matters because property is often moved from one partner to the other as part of a divorce, dissolution, annulment or formal separation. The key point is that the exemption is limited. It applies only to certain transfers between the couple themselves, and only where the transfer is connected with the breakdown of the marriage or civil partnership.

What this rule is about

SDLT normally applies when a chargeable interest in land is transferred for consideration. However, Schedule 3 to Finance Act 2003 contains exemptions for some transactions that would otherwise fall within the SDLT rules.

One of those exemptions covers certain transactions made when a marriage or civil partnership is ending. The policy behind it is straightforward: where property is being rearranged between the couple as part of the legal and practical consequences of separation, divorce or dissolution, SDLT may be switched off.

This is not a general exemption for any transfer between spouses or civil partners. It is aimed at transfers that arise because the relationship is ending and that fall within the categories set out in the legislation.

What the official source says

The official material says that certain transactions are exempt if they are made between the parties to a marriage or civil partnership and arise from one of the following:

• a qualifying court order
• an agreement between the spouses or civil partners made in contemplation of, or in connection with, the dissolution or annulment of the marriage or civil partnership
• their judicial separation or a separation order

The source also makes an important limitation clear: the exemption is not available if the transaction involves anyone other than the spouses or civil partners.

What this means in practice

In practical terms, the exemption can apply where one spouse transfers their share in the former family home to the other as part of divorce arrangements, or where civil partners divide property under arrangements connected with dissolution.

The most important practical questions are:

• Is the transfer between the two spouses or the two civil partners only?
• Is it being made because of the ending of the relationship?
• Does it arise from a court order, a relevant agreement, or judicial separation or a separation order?

If the answer to those points is yes, the transfer may be exempt from SDLT.

If another person is part of the transaction, the exemption is not available on the basis described in the source. That point is easy to miss. For example, a transfer that is structured to include a third party at the same time may fall outside this exemption even if the wider background is a divorce or dissolution.

How to analyse it

A sensible way to approach the issue is to work through the transaction step by step.

• Identify the parties to the land transaction. The exemption described here is for transactions between the spouses or civil partners themselves.
• Identify why the transfer is being made. There must be a real connection with the ending of the marriage or civil partnership.
• Check the legal basis for the transfer. Is it required by a court order, or made under an agreement in contemplation of or in connection with dissolution or annulment, or made because of judicial separation or a separation order?
• Check whether anyone else is involved in the transfer. If so, this exemption may not apply.
• Keep the SDLT analysis separate from family law language. Calling something a divorce settlement does not by itself guarantee that the SDLT exemption applies. The transaction still needs to fit within the statutory conditions.

This is also a good example of why the exact form of the land transaction matters. The family arrangement may be wider than the SDLT transaction. SDLT looks at the legal transaction affecting the land and whether it falls within the exemption.

Example

Illustration: A husband and wife own a house jointly. As part of their divorce arrangements, one spouse transfers their interest in the house to the other under a court-approved order. On the facts described in the source, this is the kind of transfer that may be exempt from SDLT because it is between the spouses and is made as a result of a qualifying court order connected with the ending of the marriage.

By contrast, if the same arrangement is structured so that the property is transferred directly to one spouse and an adult child at the same time, the exemption described in the source would not be available in that form because the transaction involves someone other than the spouses.

Why this can be difficult in practice

The source is short, but real cases can be more complicated than the basic rule suggests.

One difficulty is identifying whether the transfer is truly made “in contemplation of” or “in connection with” the dissolution or annulment. That usually requires looking at the surrounding facts and documents, not just the timing.

Another difficulty is transaction structure. Family settlements often involve refinancing, trustees, children, companies or new co-owners. Once someone other than the spouses or civil partners is involved in the land transaction, the exemption described in the source may no longer fit.

A further practical point is that the exemption discussed here is about a specific category of exempt transaction. It should not be confused with the separate question of whether there is chargeable consideration, or with any other relief or exemption elsewhere in the SDLT rules.

Key takeaways

• Some transfers of land between spouses or civil partners are exempt from SDLT when made because the relationship is ending.
• The transfer must be between the couple themselves and must arise from a qualifying court order, relevant agreement, judicial separation or separation order.
• If the transaction involves a third party, this exemption is not available on the basis set out in the official source.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Exemptions from Stamp Duty Land Tax on Ending Marriages or Civil Partnerships

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