Examples of Scheme Transactions Under Section 75A(3)(A) Explained

Section 75A SDLT: examples of scheme transactions

Section 75A is an anti-avoidance rule for SDLT that can apply where land passes from one person to another through a series of connected steps and the overall SDLT paid is lower than expected. HMRC makes clear that relevant “scheme transactions” are not limited to the main sale or transfer and can include leases, sub-sales, and rights affecting whether a lease continues or ends.

• HMRC’s examples of scheme transactions include a lease acquired from a freehold owned or previously owned by the seller, a sub-sale, and a lease granted to a third party with a right to terminate.
• The exercise of a termination right, an agreement not to use that right, or a variation of that right can also count as part of the scheme.
• The list in HMRC’s manual is not exhaustive, so other legal or contractual steps may still fall within section 75A.
• In practice, you should identify the original owner and the final recipient, then review every step in the arrangement rather than looking only at the main transfer.
• The key question is whether the steps form part of the same overall arrangement and helped move the property interest or produce a lower SDLT outcome.

Scroll down for the full analysis.

Section 75A SDLT: examples of “scheme transactions”

This page explains what HMRC means when it gives examples of “scheme transactions” for the purposes of section 75A of the SDLT rules. The point matters because section 75A is an anti-avoidance provision. It can apply where a property moves from one person to another through a series of transactions, and the SDLT result of those steps is lower than it would otherwise have been.

What this rule is about

Section 75A is concerned with arrangements involving land transactions where, looking at the overall effect, land passes from one person to another through one or more connected steps. In that context, the legislation looks not only at the obvious sale or transfer, but also at other steps that form part of the wider arrangement.

The HMRC manual page here is dealing with one narrow but important question: what kinds of steps can count as “scheme transactions” within section 75A(3)?

This matters because people sometimes assume that only a straightforward purchase contract or transfer can be relevant. The official material makes clear that the concept is wider. A “scheme transaction” can include leases, sub-sales, termination rights, and changes to those rights. The list is not closed.

What the official source says

HMRC’s manual says that section 75A(3) gives examples of transactions that may be scheme transactions. The examples listed are:

• the acquisition by P of a lease deriving from a freehold owned or formerly owned by V
• a sub-sale to a third person
• the grant of a lease to a third person subject to a right to terminate
• the exercise of a right to terminate a lease or to take some other action
• an agreement not to exercise a right to terminate a lease or to take some other action
• the variation of a right to terminate a lease or to take some other action

The manual also states that this list is not exhaustive. In other words, these are examples, not a complete definition. Other types of transactions can also be scheme transactions if they fall within the legislation.

What this means in practice

The practical message is that section 75A is designed to look through the structure of an arrangement, not just its labels.

If land starts with V and ends up, directly or indirectly, with P, HMRC may examine all the legal steps in between. Those steps may include:

• intermediate sales
• leases carved out of a freehold
• sub-sales
• rights that allow a lease to be terminated
• decisions to exercise, not exercise, or vary those rights

That means SDLT analysis cannot stop at asking, “What was the main transfer?” You may also need to ask whether other contractual or property-law steps formed part of the same arrangement and affected the SDLT position.

The references to termination rights are especially important. A transaction does not have to be a completed sale at the end of the chain to matter. A right to bring a lease to an end, a choice not to use that right, or a change to the terms of that right may itself be one of the relevant steps in the overall scheme.

How to analyse it

A sensible way to approach this point is to work through the arrangement in stages.

• Identify V and P. Who started with the property interest, and who ended up with it?
• List every legal step in the arrangement, not just the main purchase or transfer.
• Check whether any lease was granted out of a freehold owned, or previously owned, by V.
• Check whether there was a sub-sale or onward sale to someone else.
• Check whether any lease was granted with a right to terminate, or with some other contingent right affecting the outcome.
• Check whether any such right was exercised, waived, left unexercised by agreement, or varied.
• Ask whether those steps were part of the same overall arrangement for section 75A purposes.
• Remember that the statutory examples are not exhaustive. Even if a step is not on HMRC’s list, it may still be relevant.

The key habit is to analyse substance and sequence. If a step helped move value or control from V to P, or helped produce a lower SDLT outcome, it may need to be considered as part of the section 75A picture.

Example

Illustration: V owns a freehold. Instead of selling the freehold directly to P, a lease is granted out of that freehold and P acquires the lease. The arrangement also includes rights allowing the lease to be terminated or altered depending on later events.

On a narrow view, someone might focus only on P’s lease acquisition. But the official material shows that the wider set of steps may all be relevant: the lease derived from V’s freehold, the existence of termination rights, and any exercise, non-exercise, or variation of those rights. Those steps may therefore be treated as scheme transactions when considering whether section 75A applies.

Why this can be difficult in practice

The manual page is short, but the underlying issue is fact-sensitive.

First, the list is expressly non-exhaustive. So there is no safe assumption that a step falls outside section 75A just because it is not specifically named.

Second, some of the listed items are not transfers in the everyday sense. For example, an agreement not to exercise a termination right may still be relevant. That can be easy to overlook in transactional documents.

Third, lease structures can be legally complex. A lease may derive from a freehold in ways that are obvious in property law terms but less obvious when people are focused only on SDLT filing positions.

Finally, this manual page gives examples, not a full test. The legislation itself determines whether section 75A applies. So the real question is not whether a step resembles one of HMRC’s examples, but whether it forms part of the arrangement caught by the statutory rules.

Key takeaways

• Section 75A can take account of a wide range of steps, not just the main sale or transfer.
• Leases, sub-sales, termination rights, and changes to those rights can all be scheme transactions.
• HMRC’s list is only illustrative, so other transaction types may also be relevant under the legislation.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Examples of Scheme Transactions Under Section 75A(3)(A) Explained

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