Guide on Apportioning Consideration in Land Transactions with Non-Chargeable Interests

SDLT apportionment of purchase price

When a deal includes land as well as other items or forms part of a wider package of transactions, SDLT is only charged on the part of the price that is fairly attributable to the land interest. The buyer must make a just and reasonable apportionment and cannot simply rely on the figures stated in the contract.

• SDLT applies to chargeable consideration for the land transaction, not automatically to the full price paid under a wider deal.
• Apportionment is needed where the purchase includes non-land assets such as furniture, equipment, goodwill, stock, or other business assets.
• A contractual split between land and non-land items may be challenged if it is not commercially realistic or just and reasonable.
• The buyer is responsible for checking the allocation independently before submitting the SDLT return.
• Useful checks include identifying exactly what is being bought, separating land from non-land assets, and reviewing any evidence such as valuations.
• Common problem areas include global prices, unclear treatment of chattels, linked transactions, and weak evidence supporting the figures used.

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SDLT apportionment: working out how much of the price is actually chargeable

This page explains what happens when a transaction includes more than just land. For Stamp Duty Land Tax, you do not automatically pay tax on the whole amount paid under a wider deal. If part of the price relates to items that are not chargeable interests in land, or if the land deal sits within a package of transactions, the consideration must be divided on a just and reasonable basis. This matters because the SDLT return must show the amount properly attributable to the land transaction, and the buyer is responsible for getting that right.

What this rule is about

SDLT is charged on chargeable consideration for a land transaction. In some cases, the amount paid under the overall deal does not relate only to land. A buyer may be paying for land and buildings, but also for movable items such as furniture or equipment. Or the buyer may be acquiring a business, where some of the price relates to land and some relates to other business assets.

In those cases, the law requires an apportionment. The aim is to identify how much of the total consideration is properly attributable to the chargeable interest in land. That amount is the starting point for SDLT.

The rule also matters where the land transaction is part of a wider arrangement involving other transactions. You cannot assume that the price written against the land element in the contract is automatically the right SDLT figure if, looking at the overall deal, that figure is not just and reasonable.

What the official source says

HMRC’s manual says that where a transaction involves acquiring or disposing of various items, and not all of them are chargeable interests in land, the consideration should be subject to a just and reasonable apportionment. The same applies where the transaction forms part of a deal that includes other transactions.

The manual identifies two common situations:

• a residential purchase where the buyer also purchases chattels as well as land and buildings
• the purchase of a business, or of business assets

HMRC also makes two practical points. First, the apportionment agreed between seller and buyer may not be a just and reasonable apportionment, even if both parties have used it for other purposes. Second, the purchaser is solely responsible for the accuracy of the SDLT return and is expected to reconsider the allocation before entering the consideration on the return.

What this means in practice

The practical effect is that the SDLT calculation may need more work than simply taking the headline purchase price from the contract.

If part of what the buyer is paying for is not land, that part should not be included in the chargeable consideration for the land transaction unless the legislation brings it in. So the buyer needs to identify:

• what is being acquired
• which items are interests in land
• which items are separate non-land assets
• how the total price should fairly be split between them

This is especially important in residential transactions where a list of fixtures, fittings, or other items is included. It is also important in business acquisitions, where the overall price may cover land, goodwill, plant, stock, and other assets.

The fact that the contract assigns a figure to non-land items does not settle the SDLT position. HMRC’s point is that the contractual allocation may have been influenced by negotiation or by other tax or commercial objectives. SDLT requires a just and reasonable apportionment, not simply acceptance of the parties’ labels.

How to analyse it

A sensible way to approach the issue is to work through the following questions.

• What exactly is included in the deal? Identify the land interests and the non-land assets separately.
• Is there a single global price, or are separate amounts stated for different elements?
• If amounts are stated, do they appear commercially realistic? A figure is not necessarily just and reasonable merely because both parties agreed it.
• If there is no reliable split, what evidence supports an allocation? This may include valuations or other objective material.
• Does the wider deal include linked or associated transactions that affect how the consideration should be viewed?
• Has the buyer independently checked the allocation before filing the SDLT return?

In more technical or disputed cases, valuation evidence may be needed. HMRC’s manual refers readers to guidance involving the Valuation Office Agency for asset valuation issues. That does not mean every case needs a formal valuation, but it does show that supportable evidence matters where the allocation is not obvious.

Example

Illustration: a buyer agrees to pay a single price for a house together with certain movable items. SDLT is charged on the consideration attributable to the land transaction, not on any part of the price that is properly attributable to separate chattels. If the contract simply gives a high figure for the chattels in order to reduce SDLT, that figure may not be accepted as just and reasonable. The buyer should consider whether the allocation reflects the real value of what is being bought and complete the SDLT return on that basis.

A similar issue arises if someone buys a trading business from a seller and part of the deal includes the premises. The overall purchase price may need to be apportioned between the property and the other business assets. SDLT applies to the amount properly attributable to the land element.

Why this can be difficult in practice

The phrase just and reasonable is flexible. That is helpful because it allows the rule to work across many different types of transaction, but it also means there is no single mechanical formula in the manual extract.

Difficulties often arise where:

• the contract uses a global price without a clear breakdown
• the parties have agreed figures for negotiation purposes that do not reflect actual values
• it is unclear whether an item is part of the land or is a separate chattel
• the transaction is one part of a wider package of deals
• there is little objective evidence to support the allocation used on the SDLT return

The buyer’s position can be uncomfortable because the buyer files the return and bears responsibility for its accuracy, even though the allocation may have been proposed by the seller or by the contract draftsman. HMRC’s manual makes clear that the buyer is expected to reconsider the allocation independently.

Key takeaways

• SDLT is not automatically charged on the whole price of a wider deal if part of that price relates to non-land assets.
• The consideration must be apportioned on a just and reasonable basis where land is acquired together with other items or as part of a wider transaction package.
• The buyer is responsible for the SDLT return and should not assume that the contract allocation is necessarily correct for SDLT purposes.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Guide on Apportioning Consideration in Land Transactions with Non-Chargeable Interests

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