What counts as a scheme transaction for SDLT section 75A?
Scheme transactions under section 75A
HMRC says connected steps in a land deal may be considered together, including non-land and later steps. This can affect the SDLT result.
- Look at the whole sequence, not one document
- Check the tax comparison as well as the connected steps
- Verify current law for transactions after 17 November 2025
Scroll down for the full analysis.
Read the original guidance here:
What counts as a scheme transaction for SDLT section 75A?
Section 75A can alter the stamp duty result when land passes through connected steps that, taken together, lead from the original owner to the eventual recipient. HMRC may look beyond the final transfer.
What this rule is about
Section 75A is an anti-avoidance rule for some land deals. It can apply where one person sells a legal right in land and another ends up with that right, or a right that comes from it.
The rule is not limited to a straightforward sale. It asks whether there were several connected transactions between the first sale and the final purchase. These are called “scheme transactions”.
That matters because, for SDLT purposes, the law can treat the connected land steps as though they were replaced by a made-up direct transaction between the relevant parties. The tax result can then be different.
What the official source says
HMRC’s manual says the phrase “scheme transactions” should be read widely. In its view, a step can count if it forms part of the setting in which the final buyer gets the land right.
The legislation sets three conditions for section 75A. This page focuses on the second one, but all three matter.
- One person, called V in the legislation, sells a legal right in land.
- Another person, called P, gets that right or a right that comes from it.
- Several transactions, including that sale and final purchase, are connected with them.
- The SDLT due on those transactions is less than the SDLT on the notional direct transaction.
The word “transaction” has a broad legal meaning here. It can include more than a land sale or lease.
- A non-land step can count.
- An agreement, offer or promise not to take action can count.
- An arrangement can count even if people would not usually call it a transaction.
- A step after the final buyer gets the land can still count.
- The legislation gives examples involving leases, sub-sales and rights to end a lease.
HMRC also says there is no need to show that anyone meant to avoid tax. The statutory test lists no motive condition. A lower SDLT outcome may therefore matter even if it was an unintended result.
What this means in practice
Do not look only at the document that puts the property into your name when companies, leases, options, side agreements or later steps form part of the deal. The whole sequence may matter.
That does not mean section 75A will always apply. The tax comparison is still needed. But missing a connected step can give the wrong starting point.
- Map the deal from the first owner to the final buyer.
- Include steps that do not themselves transfer land.
- Include agreements that limit what someone can do.
- Include later transactions where they are part of the wider facts.
- Do not assume an innocent commercial reason ends the question.
How to analyse it
Start with the end result by asking who owned the land first, who ended up with it, and which related steps link those two positions. Then work backwards and forwards through every related step.
- Identify V, the person who first gave up the land right.
- Identify P, the person who finally received it or a right from it.
- Put every agreement, payment and land step on a dated timeline.
- Ask whether each step helped form the context for the sale and final purchase.
- Check whether a lease, option, promise or company step is part of that context.
- Compare SDLT on the actual land transactions with SDLT on a direct transfer from V to P.
- If the statutory conditions are met, work out the amount for the notional transaction.
The last point is important. The notional transaction uses the largest amount given by one person, or received by V or a connected person, for the scheme transactions. It is not necessarily the figure on one transfer document.
Example
Imagine Rita owns a commercial property, and, after a series of agreements is put in place, Ben ends up with a lease that derives from Rita’s ownership. Ben pays £800,000 across the arrangements. One related agreement is signed after Ben receives the lease.
That later agreement is not automatically irrelevant just because it came later. HMRC’s manual says it may still be a scheme transaction if it is connected with the route by which Ben got the lease.
Next, the figures must be tested. If SDLT on the actual land steps is lower than SDLT on a notional direct transfer from Rita to Ben, section 75A may apply. You cannot decide that question from the £800,000 figure alone, because the full payments and the SDLT rules at the time also matter.
Why this can be difficult in practice
Although a document may plainly exist, the hard question is whether it has a sufficiently close connection with both the sale and final purchase to belong in the scheme. You might think a later step cannot count. It can. You might also think only land transfers matter. The legislation expressly says otherwise.
- A side letter may matter even where it transfers no land.
- A promise not to use a right may be relevant.
- A lease structure can make it harder to identify the first owner and final buyer.
- Payments may be split across several agreements.
- A commercial purpose does not, by itself, prevent section 75A applying.
- HMRC’s wide approach is guidance, so the wording of the legislation remains the legal starting point.
Key takeaways
- Section 75A looks at connected steps, not just the final transfer.
- A scheme transaction can be a non-land or later transaction.
- No tax avoidance motive is required by the statutory conditions.
- All section 75A conditions, including the SDLT comparison, must be checked.
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 — the original owner and final buyer condition; transactions connected with the land sale and purchase; the tax comparison needed before the rule applies; the wide statutory meaning of transaction; examples of transactions within the anti-avoidance rule; replacement of land steps with a notional transaction; working out the amount paid on the notional transaction
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 a particular step is connected closely enough to the sale and final purchase depends on the full facts and documents.
- The source says HMRC takes a broad view, but the boundaries of that view are not set out as a simple checklist.
- The supplied statutory text is current only to 17 November 2025. Current-law verification is needed for a transaction after that date.
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, transfers, leases and side agreements
- a timeline showing every step before and after the land purchase
- details of who paid money and who received it
- evidence showing the original owner and final buyer
- SDLT calculations for the actual land steps and the possible direct transaction
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 What counts as a scheme transaction for SDLT section 75A? [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 - the original owner and final buyer condition https://www.legislation.gov.uk/ukpga/2003/14/section/75A/2025-11-17 - FA 2003 section 75A - transactions connected with the land sale and purchase https://www.legislation.gov.uk/ukpga/2003/14/section/75A/2025-11-17 - FA 2003 section 75A - the tax comparison needed before the rule applies https://www.legislation.gov.uk/ukpga/2003/14/section/75A/2025-11-17 - FA 2003 section 75A - the wide statutory meaning of transaction https://www.legislation.gov.uk/ukpga/2003/14/section/75A/2025-11-17 - FA 2003 section 75A - examples of transactions within the anti-avoidance rule https://www.legislation.gov.uk/ukpga/2003/14/section/75A/2025-11-17 - FA 2003 section 75A - replacement of land steps with a notional transaction https://www.legislation.gov.uk/ukpga/2003/14/section/75A/2025-11-17 - FA 2003 section 75A - working out the amount paid on the notional transaction 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/sdltm09170 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 a particular step is connected closely enough to the sale and final purchase depends on the full facts and documents. - The source says HMRC takes a broad view, but the boundaries of that view are not set out as a simple checklist. - The supplied statutory text is current only to 17 November 2025. Current-law verification is needed for a transaction after that date. 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: What counts as a scheme transaction for SDLT section 75A?
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