When another deal can be ignored for SDLT: incidental transactions
Incidental transactions and SDLT
A payment or deal linked to a property arrangement may sometimes be ignored under the SDLT anti-avoidance rules. That depends on its real purpose and whether it helped make the land transfer happen.
- Possible examples include building work, non-land supplies and finance.
- Exclusions take priority where section 75B says a deal is not incidental.
- Partly incidental payments need a just and reasonable split.
Scroll down for the full analysis.
Read the original guidance here:
When another deal can be ignored for SDLT: incidental transactions
When another deal can be ignored for SDLT: incidental transactions
Some property arrangements involve more than one payment or deal, but for stamp duty land tax a separate deal can sit outside the calculation only when it is genuinely incidental to the wider arrangement rather than part of the route that transfers the land. The connection must be limited.
What this rule is about
Section 75A is an anti-avoidance rule. In some arrangements, it treats the buyer as having made an assumed land sale. Section 75B identifies assumed-sale payments. It tells you which other payments count when you work out the amount for that assumed land sale.
The point is narrow, but it can matter a great deal. A payment remains relevant where, despite appearing in a separate contract or carrying a different label, it helped bring about the land transfer or formed a required step within the wider arrangement. Paperwork alone does not decide it.
The key question is practical: did that transaction help make the land transfer happen?
What the official source says
HMRC’s manual explains that a transaction may be incidental only when the parties entered into it solely for a purpose linked to one of the situations in section 75B. The word “may” matters. These are examples that can qualify, not automatic safe routes.
- Building work that relates to land the arrangement transfers may be incidental.
- The sale or supply of something other than land may be incidental.
- A mortgage-backed loan may be incidental where it funds part of the process that transfers the land.
- Other finance may likewise be incidental when it enables the buyer, or another person involved in the arrangement, to fund the process through which the land is transferred. Its role is decisive.
- A transaction is not incidental when it forms part of the process, or of a series of steps, that effects the land transfer between the relevant parties. It counts.
- Parties cannot treat a transaction as incidental when they make the land transfer depend on completing it.
- It cannot be incidental if section 75A(3) specifies its category.
Section 75B also deals with mixed transactions. If only part of a transaction is incidental, you do not ignore the whole amount. You divide it on a just and reasonable basis.
HMRC’s manual says that its separate exclusion rules take priority. An exclusion therefore makes a transaction count even when it otherwise appears to fit one of the examples.
What this means in practice
Start with the substance, not the paperwork. A loan, supply contract or building agreement may look separate. That does not settle the issue if the parties needed it as a step in getting the land from the seller to the buyer.
- Map every agreement, payment and transfer in the arrangement.
- Check whether the land transfer could have happened without the other deal.
- Check whether either contract makes completion depend on the other.
- Keep evidence of what each payment was really for.
- A mortgage alone does not make finance irrelevant.
If an exclusion applies, you must include the amount paid for that transaction when you work out the amount for the assumed land sale. This is the part people can miss.
How to analyse it
Work through the arrangement in its real order. The name given to a payment is less useful than its purpose and effect.
- Identify the land that moved and the people involved.
- List the steps that led to the buyer receiving the land.
- For each other transaction, ask why the parties entered into it.
- Ask whether its only purpose was building work, non-land goods or services, or finance.
- Ask whether it was itself part of the transfer process.
- Ask whether the land transfer depended on it being completed.
- Check the separate exclusion rules referred to by HMRC.
- If a payment covers more than one thing, make a fair split backed by evidence.
What actually decides the point? Usually, the links between the contracts and the steps needed to complete the land transfer.
Example
Imagine Maya pays £600,000 under a package of agreements. £540,000 relates to the steps that transfer a site to her. The remaining £60,000 pays for equipment that is not land. That equipment payment may be incidental where Maya paid it solely to obtain the equipment, rather than to advance the site’s transfer, and no exclusion applies. The contracts decide.
Now change one fact. Suppose Maya cannot receive the site unless the equipment contract completes. That link may prevent Maya from treating the equipment deal as incidental. The full facts and contracts matter.
If only £40,000 of the equipment agreement is genuinely separate, rather than the full £60,000, section 75B requires a just and reasonable split. It does not permit an all-or-nothing answer.
Why this can be difficult in practice
Commercial arrangements often have several linked documents. Parties may sign them on different days and make payments through different accounts. That can hide the real connection between them.
- A separate contract does not necessarily mean a separate transaction for this purpose.
- Calling a payment “finance” does not answer whether it was part of the transfer process.
- Building work may relate to the land but still fail because an exclusion applies.
- A fair split needs a clear basis, not a convenient figure chosen after the event.
- HMRC’s manual is its view of the law; section 75B is the legal starting point.
The supplied legislation records its current status only to 17 November 2025. The current statutory position should be checked for a transaction after that date.
Key takeaways
- A separate deal is ignored only if it is merely incidental.
- The exclusions can override a possible incidental purpose.
- Where a deal is partly incidental, make a just and reasonable split.
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 — anti-avoidance rules for certain land transaction arrangements
- FA 2003 section 75B — when an incidental transaction can be ignored
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 something is merely incidental often depends on the real purpose of the arrangement and how the land transfer was brought about.
- A fair division of a combined payment will depend on the evidence and the facts.
- The supplied statutory text is current only to 17 November 2025. Its current status should be checked for transactions 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 and completion documents for every step in the arrangement
- A timeline showing how the land moved from seller to buyer
- Finance documents, security documents and payment records
- Invoices and agreements for building work, goods or services
- Evidence supporting any split of a combined payment
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 When another deal can be ignored for SDLT: incidental transactions [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 - anti-avoidance rules for certain land transaction arrangements https://www.legislation.gov.uk/ukpga/2003/14/section/75A/2025-11-17 - FA 2003 section 75B - when an incidental transaction can be ignored https://www.legislation.gov.uk/ukpga/2003/14/section/75B/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/sdltm09260 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 something is merely incidental often depends on the real purpose of the arrangement and how the land transfer was brought about. - A fair division of a combined payment will depend on the evidence and the facts. - The supplied statutory text is current only to 17 November 2025. Its current status should be checked for transactions 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 1 September 2026
Useful article? You may find it helpful to read the original guidance here: When another deal can be ignored for SDLT: incidental transactions
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