Section 75A: comparing stamp duty with the assumed direct sale
The key point
Section 75A compares SDLT on a real property arrangement with SDLT on an assumed direct sale from the original owner to the final buyer.
- The real steps must produce less SDLT.
- The assumed sale uses V’s original land interest.
- Relief must be tested on that assumed sale.
Scroll down for the full analysis.
Read the original guidance here:
Section 75A: comparing stamp duty with the assumed direct sale
Section 75A: comparing stamp duty with the assumed direct sale
Section 75A can replace a series of property steps with one assumed direct sale for stamp duty land tax. The key question is whether the real arrangement, after every relevant land step has been counted for SDLT, produced less SDLT than the assumed sale would have produced. That is the comparison.
What this rule is about
Property arrangements can involve several people and several steps. For example, the original owner may sell one type of property right, while the final buyer receives a different right through an intermediary.
Section 75A is an anti-avoidance rule. It can apply where a chain of connected steps produces less stamp duty than a direct sale from the original owner to the final buyer.
That comparison sounds theoretical. It can change the SDLT result.
What the official source says
HMRC’s manual says the third condition is a comparison test. Add up the SDLT due on all the steps in the arrangement. Then compare that total with the SDLT due on an assumed transaction in which V, the original owner, sells their land interest directly to P, the final buyer.
- The actual arrangement must produce less SDLT than the assumed direct sale.
- The assumed sale is from V to P.
- It concerns the land interest V sold, not a later interest created from it.
- If Section 75A applies, SDLT ignores the land steps in the arrangement and instead charges the assumed sale, even where the actual steps transferred different interests between the parties.
That last point matters when looking at a relief. The question is whether relief would apply to P taking V’s original interest directly. It is not enough that relief may fit the different interest P actually received.
What this means in practice
The final document alone cannot test the arrangement. You need the whole chain: who owned what at the start, what each person did, and what was paid at every stage.
HMRC’s approach is not that every multi-step deal fails. The comparison must show a lower SDLT total on the real steps. Other conditions for Section 75A must also be met.
- Map the original owner’s interest before any steps take place.
- Identify the final buyer and the interest they receive.
- Calculate SDLT on every actual step that carries SDLT.
- Calculate SDLT again on the assumed direct sale from V to P.
Start with the direct-sale comparison when your solicitor raises Section 75A. Labels given to the steps will not answer it.
How to analyse it
Start with the facts, not the tax result. Timeline the events. Check the property interest used for the assumed sale.
- Who is V, the person who disposed of the original land interest?
- Who is P? That person ends up with the interest, or with one derived from it.
- What are all the connected steps, including steps that are not land sales?
- How much SDLT is due on those actual steps in total?
- What SDLT would be due if V sold the original interest directly to P?
- Would a relief apply to that assumed direct sale on its own terms?
- Does the lower result arise only from a protected property-finance or Schedule 9 arrangement?
Keep the two comparisons separate. First work out the actual SDLT total. Only then test the assumed direct sale.
Example
Imagine that V owns a freehold. A series of steps means P ends up with a lease created from that freehold. SDLT across the actual land steps is £4,000. SDLT on an assumed direct transfer of V’s freehold to P would be £9,000.
The £5,000 difference meets the comparison condition. But that does not settle the whole issue. The other Section 75A conditions remain relevant, and any relief must be tested by asking whether it would apply if P took V’s freehold directly rather than the interest actually received.
Why this can be difficult in practice
In practice, identifying the assumed sale that the comparison requires is often the difficult part. People may compare P’s actual lease with the original freehold, then apply a relief as if P had bought the lease. HMRC’s manual says that is not the comparison required.
Some arrangements also use rules for alternative property finance, right to buy, or shared ownership. The listed provisions must be the sole reason for the tax difference; otherwise, Section 75A can apply. The word “only” does real work here.
- A relief for the actual step may not fit the assumed direct sale.
- A land step can be ignored even though other connected steps remain relevant.
- A protected arrangement combined with another relief may still need a Section 75A review.
- The paperwork may not show every payment or connected agreement clearly.
Key takeaways
- Compare all actual SDLT with an assumed direct sale from V to P.
- Test relief on the original interest V sold.
- The comparison condition alone does not decide whether Section 75A applies.
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 — comparison between actual and assumed stamp duty; replacement of land steps with assumed transaction; exceptions for specified finance and ownership arrangements
- FA 2003 section 75C — reliefs available for the assumed land 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 relief would apply to the assumed direct transfer depends on the facts and the terms of that relief.
- The bundled legislation is current only to 17 November 2025. The law should be checked against an official current source 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.
- A diagram and documents showing every step in the arrangement
- The interest V sold and the interest P received
- The stamp duty position for each actual step
- The amount paid or received in connection with each step
- Details of any relief or special property-finance arrangement used
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: comparing stamp duty with the assumed direct sale [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 - comparison between actual and assumed stamp duty https://www.legislation.gov.uk/ukpga/2003/14/section/75A/2025-11-17 - FA 2003 section 75A - replacement of land steps with assumed transaction https://www.legislation.gov.uk/ukpga/2003/14/section/75A/2025-11-17 - FA 2003 section 75A - exceptions for specified finance and ownership arrangements https://www.legislation.gov.uk/ukpga/2003/14/section/75A/2025-11-17 - FA 2003 section 75C - reliefs available for the assumed land transaction https://www.legislation.gov.uk/ukpga/2003/14/section/75C/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/sdltm09210 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 relief would apply to the assumed direct transfer depends on the facts and the terms of that relief. - The bundled legislation is current only to 17 November 2025. The law should be checked against an official current source 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: Section 75A: comparing stamp duty with the assumed direct sale
Search Land Tax Advice with Google
