Guide to Notional Land Transactions and Responsibilities Under Section 75A

Section 75A SDLT: notional transaction and filing responsibility

If section 75A applies, SDLT is not based only on the individual documented steps in a scheme. Instead, the land transaction steps can be ignored and replaced with a single notional transaction, treated as a direct transfer from the original owner to the final acquirer. The final acquirer is then treated as the purchaser and must file the SDLT return and pay the tax, while non-land steps may still affect the amount charged.

• Section 75A targets arrangements where land passes through a series of steps but ends up with a different person from the original owner.
• The legislation can substitute a notional land transaction from V, the original holder, to P, the person treated as the final acquirer.
• If the rule applies, the scheme transactions that are land transactions are disregarded for SDLT and replaced by that notional transaction.
• P is treated as the purchaser for SDLT purposes, even if P was not named as purchaser in the actual documents.
• Non-land transactions are not ignored and may still be relevant when calculating the chargeable consideration.
• In practice, the difficult issues are often identifying P, separating land and non-land steps, and deciding whether the statutory conditions for section 75A are met.

Scroll down for the full analysis.

Section 75A SDLT: the notional land transaction and who must file

This page explains what happens if the SDLT anti-avoidance rule in section 75A applies. The key effect is that the actual land transactions in a scheme can be ignored and replaced with a single hypothetical, or notional, land transaction. That substituted transaction is then taxed as if the original owner transferred the chargeable interest directly to the final acquirer.

What this rule is about

Section 75A is aimed at arrangements where land passes through a series of steps, but the overall result is that one person ends up with a chargeable interest that originally belonged to another person. If the statutory conditions are met, SDLT is not worked out simply by looking at each step in isolation.

Instead, the legislation can reconstruct the position. It asks, in effect: if you look at the whole scheme, who started with the chargeable interest, and who ended up with it? The law can then substitute a notional land transaction between those two people.

On this page, the source uses:

• V for the person disposing of the chargeable interest at the start
• P for the person who is treated as acquiring that chargeable interest at the end

This matters because SDLT liability may then fall on P, even if P was not the purchaser under the land transaction that was actually documented.

What the official source says

The HMRC manual says that where all the conditions for section 75A are met:

• any scheme transactions that are themselves land transactions are disregarded
• those land transactions are replaced by a notional land transaction
• that notional transaction consists of V disposing of the chargeable interest and P acquiring it
• P is treated as the purchaser for SDLT purposes
• P must file the land transaction return for the notional transaction and pay the SDLT due

The manual also makes an important further point. If some of the steps in the scheme are not land transactions, they are not ignored. Instead, they may still matter when working out the chargeable consideration for the notional transaction.

So the reconstruction is selective. Land transactions in the scheme are disregarded and replaced. Non-land steps are not disregarded, and may feed into the tax calculation.

What this means in practice

If section 75A applies, you do not simply tax the actual transfer documents that happened to be used. You replace the relevant land transaction steps with a deemed direct transfer from V to P.

The practical consequences are significant:

• the SDLT analysis shifts from the formal steps to the overall effect of the scheme
• the person who must account for SDLT may be P, even if another party appeared as purchaser in one of the actual transactions
• the amount on which SDLT is charged may include value or payments arising under non-land steps in the wider arrangement

This is why section 75A can produce a very different SDLT result from the one suggested by the individual documents viewed separately.

How to analyse it

A sensible way to approach this point is:

• Identify V. Who originally held the chargeable interest?
• Identify P. Who ultimately acquired that chargeable interest for the purposes of section 75A?
• List all the scheme transactions. Separate the land transactions from the non-land transactions.
• Ask whether the statutory conditions for section 75A are met. This page assumes they are; it does not set out those conditions in full.
• If section 75A applies, disregard the scheme transactions that are land transactions.
• Substitute a notional land transaction under which V disposes of the chargeable interest to P.
• Treat P as the purchaser for SDLT filing and payment purposes.
• When calculating chargeable consideration for the notional transaction, do not ignore non-land transactions merely because they are not land transactions. They may still be relevant.

The critical point is that the notional transaction is not just a narrative device. It creates the SDLT charge that must be returned and paid.

Example

Illustration: A property interest starts with Seller Ltd. A series of planned steps then takes place. One company acquires rights, another entity enters into a separate non-land arrangement, and the end result is that Buyer Ltd ends up with the chargeable interest.

If section 75A applies, the actual land transaction steps in the scheme may be disregarded. SDLT is then charged as if Seller Ltd had transferred the chargeable interest directly to Buyer Ltd. Buyer Ltd is treated as the purchaser of the notional transaction, so Buyer Ltd must file the SDLT return and pay the tax due. Any non-land steps are not automatically ignored and may still affect the amount of chargeable consideration.

Why this can be difficult in practice

The difficult part is often not the statement of the rule, but applying it to real facts.

First, identifying P is not always straightforward where several entities are involved or where interests are split, layered, or moved through contractual arrangements.

Second, separating land transactions from non-land transactions can be harder than it sounds. A step that does not itself transfer land may still be economically central to the arrangement and relevant to consideration.

Third, this page only explains what happens once section 75A applies. In practice, there may be dispute about whether the statutory conditions are in fact met. That can be highly fact-sensitive.

Fourth, the reconstruction under section 75A does not mean every real-world step disappears for all purposes. The source only says that scheme transactions which are land transactions are disregarded for the substitution exercise. Non-land transactions remain relevant, particularly when calculating consideration.

Key takeaways

• If section 75A applies, the land transaction steps in the scheme are replaced by a notional direct transfer from V to P.
• P is treated as the purchaser of that notional transaction and must file the SDLT return and pay the SDLT.
• Non-land transactions are not disregarded and may still affect the chargeable consideration for the notional transaction.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Guide to Notional Land Transactions and Responsibilities Under Section 75A

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