Section 75A: SDLT can apply even where tax avoidance was not the aim
Section 75A in brief
Section 75A can apply where connected property steps leave less SDLT payable than a notional direct sale. It is an objective test, so it does not require proof that anyone intended to avoid tax.
- Check the full chain of connected arrangements.
- Compare SDLT on the actual steps with the notional direct sale.
- Verify current legislation for transactions after 17 November 2025.
Scroll down for the full analysis.
Read the original guidance here:
Section 75A: SDLT can apply even where tax avoidance was not the aim
Section 75A: SDLT can apply even where tax avoidance was not the aim
It can apply when a chain of property steps produces less SDLT than a direct sale would have produced, even if those steps were taken for reasons unrelated to tax. Intent is not decisive.
What this rule is about
People often assume that an anti-avoidance rule matters only where someone planned a tax scheme designed to reduce the SDLT that would otherwise be payable. That assumption is wrong. Section 75A considers what happened across the arrangement, compares the SDLT outcome with the tax on a direct sale, and does not turn on the parties’ purpose. It is objective.
HMRC’s manual says the rule was introduced in response to arrangements that reduced or removed SDLT in a way contrary to the intended effect of the SDLT legislation. The manual is HMRC guidance, not the law itself. The legal test is in section 75A.
That distinction matters. A genuine business reason for using several steps may not end the question.
What the official source says
HMRC says section 75A is an objective test. In everyday terms, it works by checking defined facts rather than trying to discover what the people involved wanted or hoped to achieve.
- An original owner must dispose of an interest in land.
- An end buyer must get that interest, or an interest that comes from it.
- A number of transactions or arrangements must be involved in connection with that sale and purchase.
- The SDLT due on those steps must be less than the SDLT due on a notional direct sale.
- The law does not require tax avoidance to be anyone’s main purpose.
The word “transaction” is broad here. It can include more than a land sale. It can cover an arrangement, an agreement, an offer, an undertaking not to act, and even a step that happens after the end buyer gets the property.
If the conditions are met, the law ignores the land transactions within the arrangement for SDLT purposes. It then creates a notional transaction: a treated direct transfer from the original owner to the end buyer.
What this means in practice
The question is not only whether each document produced the SDLT result expected for that document. You must also stand back and look at the whole set of connected steps.
What actually matters? The before-and-after position, the links between the steps, and the SDLT comparison.
- A lower SDLT result can be enough to make section 75A relevant.
- A commercial reason for the arrangement does not itself prevent the rule applying.
- A person does not need to have intended to avoid SDLT.
- A later step can still form part of the arrangement.
- The end buyer may receive a lease or another interest derived from the original owner’s interest.
This does not mean every linked property deal is caught. The statutory conditions still have to be proved. But it does mean that calling a structure ordinary or commercial does not settle the SDLT position.
How to analyse it
Start with the property interest and the people involved. Then map every connected step in date order. Only after that should you compare the SDLT results.
- Identify the original owner and the end buyer.
- Work out exactly what interest in the property the end buyer received.
- List every sale, lease, agreement, option and related arrangement.
- Ask whether those steps were connected with the original sale and end purchase.
- Calculate SDLT on the actual steps.
- Work out the notional direct transaction required by section 75A.
- Compare the two SDLT amounts.
- Check whether a limited statutory exclusion applies.
The notional transaction is not just a rough estimate. Section 75A sets rules for its date and for the amount treated as paid. Those details can affect the tax result.
Example
Imagine that Priya owns a property and Ben ends up with it after several connected steps. Assume the SDLT on the actual steps totals £6,000. Assume that, after applying the statutory rules to the notional direct sale from Priya to Ben, the SDLT would be £10,000.
If all the other section 75A conditions are met, the £4,000 difference is the issue. It does not matter, for this purpose, whether Ben and Priya used the steps for a commercial reason and did not set out to reduce stamp duty.
This is only an illustration. It does not show a rate or a full calculation. The actual documents, payments and dates would decide the real answer.
Why this can be difficult in practice
Usually, the difficulty lies not in locating words such as “tax avoidance”, but in identifying every connected step, deciding whether it belongs to the arrangement, and applying the statutory comparison correctly. There is no main-purpose test in section 75A.
You might think only property transfers count. They do not. A right may matter when it is granted, changed, ended or left unused, if it forms part of the connected steps that have to be assessed together. Context matters.
- Separate documents may be part of one wider arrangement.
- A step after the purchase may still be relevant.
- The end buyer may receive something other than the original freehold.
- Payments made by or received by different people can matter to the notional transaction.
- A lower SDLT result is necessary, but it is not the whole test.
- Current legislation should be checked for transactions after 17 November 2025.
Key takeaways
- Section 75A looks at the result of connected property steps, not just motive.
- A genuine commercial reason does not by itself stop the rule applying.
- Map every step and compare actual SDLT with the notional direct sale.
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 75A — anti-avoidance rule for linked land transaction arrangements
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 separate steps are involved in connection with the original sale and the end buyer’s purchase can depend heavily on the documents and facts.
- The supplied legislation is current only to 17 November 2025. The position for a transaction after that date needs checking against current legislation.
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.
- Contracts, transfer documents, leases and any options or termination rights
- A timeline showing when each step was agreed, completed or substantially performed
- Details of every payment and of who gave or received it
- An SDLT calculation for each actual step and for the statutory notional transaction
- Evidence showing the relationship between the original owner, end buyer and other parties
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 Section 75A: SDLT can apply even where tax avoidance was not the aim [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 75A - anti-avoidance rule for linked land transaction arrangements https://www.legislation.gov.uk/ukpga/2003/14/section/75A/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/sdltm09090 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 separate steps are involved in connection with the original sale and the end buyer's purchase can depend heavily on the documents and facts. - The supplied legislation is current only to 17 November 2025. The position for a transaction after that date needs checking against current legislation. 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 31 August 2026
Useful article? You may find it helpful to read the original guidance here: Section 75A: SDLT can apply even where tax avoidance was not the aim
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