Guidance on Identifying ‘P’ in Multiple Candidate Scenarios Under Section 75A

Identifying “P” under SDLT section 75A where there is more than one possible person

Where section 75A applies to a series of connected land transactions, SDLT is charged on a notional transfer from the seller (“V”) to the purchaser (“P”). If more than one person could appear to be “P”, HMRC’s approach, based on Project Blue, is to look at the arrangements as a whole rather than tracing the steps mechanically. The key question is who gained the SDLT advantage, or who would have paid the tax if the same result had been achieved by a direct transfer.

• Section 75A is an anti-avoidance rule aimed at schemes where a series of transactions reduces SDLT below what would have been due on a straightforward transfer.
• If several parties acquire the land or interests derived from it, “P” is not chosen by simply following the transaction chain step by step.
• The correct approach is purposive: consider the whole scheme and identify the person who really benefited from the SDLT saving.
• A useful cross-check is to ask who would have been the purchaser liable for SDLT if the commercial outcome had been achieved directly, without the scheme steps.
• This can be fact-sensitive, especially where an intermediate legal acquirer is different from the party that gained the overall commercial benefit.

Scroll down for the full analysis.

How to identify “P” under SDLT section 75A when more than one person could qualify

This page explains a narrow but important point in the SDLT anti-avoidance rules. Section 75A can apply where a series of connected transactions has been used so that less tax is paid than would have been due on a straightforward land transfer. In those cases, the legislation taxes a notional transaction between “V” and “P”. The difficulty is that, in some arrangements, more than one person may appear to be a possible “P”. The official material says that you do not solve that by looking at the transactions one by one in sequence. You look at the scheme as a whole and identify the person who obtained the tax advantage, or who would have borne the tax if the scheme had not been used.

What this rule is about

Section 75A is aimed at SDLT avoidance through a series of transactions. Broadly, it can apply where:

• a seller, called “V”, disposes of a chargeable interest,
• another person, called “P”, acquires either that interest or one derived from it, and
• the total SDLT paid on the actual transactions is less than the tax that would have been due on a direct transfer from V to P.

Where that happens, the legislation can impose SDLT by treating there as having been a land transaction from V to P for consideration determined under the section.

The issue covered by this page is identifying who “P” is when the scheme includes several acquisitions or derived interests, so that more than one person could appear to fit the description.

What the official source says

The HMRC manual says the legislation does not itself give a direct answer where there are multiple possible candidates for “P”. It refers to the Supreme Court decision in Project Blue Ltd v HMRC.

According to the manual, the court rejected a purely sequential approach. In other words, you do not simply trace the interest through the chain and pick a person by following the steps mechanically.

Instead, the court adopted a purposive approach. The manual explains that the purpose of section 75A is to stop a loss of tax that would otherwise arise because of the combined effect of the real-world transactions taken together.

On that basis, where there is more than one possible candidate, “P” is identified by considering all the scheme transactions and asking who obtained the tax benefit from the scheme, or who would have been liable for the tax if the scheme transactions had not been used.

What this means in practice

This is an anti-avoidance interpretation point. It matters because the identity of “P” determines who is treated as the purchaser in the notional transaction and therefore who bears the SDLT charge under section 75A.

The practical message is that the answer is driven by the overall effect and purpose of the arrangements, not just legal form at each intermediate step.

So if several entities acquire interests at different stages, the key question is not merely “who acquired something after V?”. The more important question is “who is the real beneficiary of the scheme in SDLT terms?”

The official material points to two closely related ways of identifying that person:

• the person who obtained the tax benefit from using the scheme transactions, or
• the person who would have been liable to the tax if the scheme had not been used and the intended outcome had been achieved more directly.

In many cases those will be the same person. If they are not, the analysis becomes more fact-sensitive and must still be carried out by looking at the arrangements as a whole.

How to analyse it

A sensible way to approach this issue is:

• Identify V, the original disposer of the chargeable interest.
• List all the transactions that may form part of the scheme arrangements.
• Identify every person who acquired the original chargeable interest or an interest derived from it.
• Stand back and ask what the scheme was designed to achieve in real terms.
• Ask which person benefited from the SDLT saving produced by the combined transactions.
• Ask who would have been the purchaser liable to SDLT if the same commercial result had been implemented without the scheme steps.
• Treat that person as the likely candidate for P, consistently with the purposive approach described in the manual and Project Blue.

This is not a free-standing test detached from the legislation. It is a way of applying the official approach where the statutory wording does not itself resolve the identity of P in a multi-party structure.

Example

Illustration: a property owner transfers land through a series of pre-arranged steps involving more than one company. One company takes an intermediate interest, and another ends up with the effective benefit of the property arrangement. Looking only at the sequence, the intermediate company might appear to be the obvious candidate for P because it acquired the interest at one stage. But if, viewed as a whole, the scheme was designed so that the second company obtained the SDLT advantage and would have been the direct purchaser in a straightforward deal, the purposive approach points to the second company as P.

This example does not state a universal result. It simply shows why a step-by-step tracing exercise may produce the wrong answer under section 75A.

Why this can be difficult in practice

The difficulty is that the legislation does not expressly tell you how to choose between multiple possible candidates. The answer therefore depends on interpreting section 75A in light of its purpose, as explained in Project Blue and reflected in the HMRC manual.

That creates a number of fact-sensitive issues:

• There may be more than one person who acquired some form of derived interest.
• The legal acquirer at one stage may not be the person who commercially benefited overall.
• The person who obtained the tax saving may need to be identified from the structure and intended outcome of the arrangements, not from one document in isolation.
• In complex chains, different parties may appear to benefit in different ways, making the “real” beneficiary harder to identify.

The official material gives a clear direction of travel, but applying it still requires a whole-arrangements analysis. A narrow focus on formal conveyancing steps may miss the point of section 75A.

Key takeaways

• Where several people could be “P” under section 75A, you do not identify P by a purely mechanical step-by-step approach.
• The official approach, based on Project Blue, is to look at all the scheme transactions and identify the person who obtained the tax benefit or who would have paid the tax in a straightforward transaction.
• This is a purposive anti-avoidance analysis, so the overall effect of the arrangements matters more than the order of intermediate steps.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Guidance on Identifying ‘P’ in Multiple Candidate Scenarios Under Section 75A

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