Guide to Identifying “V” and “P” for Section 75A Compliance

Section 75A SDLT: identifying the seller and purchaser

Before section 75A of the SDLT rules can apply, you must first identify who disposed of the land interest (“V”) and who acquired that interest, or an interest derived from it (“P”). HMRC’s view is that this is an objective test based on the actual transactions in the arrangement, not on intention, convenience, or discretion.

• The first gateway condition is that one person disposes of a chargeable interest and another person acquires that same interest or one derived from it.
• Identifying V and P must be done by looking at the real steps in the scheme as a whole, including any intermediate transfers or entities.
• P does not have to acquire exactly the same legal interest as V disposed of; it may be enough if the acquired interest is carved out of or comes from the original interest.
• A practical approach is to map the scheme transactions, identify the original interest, track what happens to it, and then see who ends up with the relevant interest.
• Cases can be difficult where there are several possible end acquirers or where the final interest is legally different from the original one, so further analysis may be needed.
• HMRC’s manual is helpful guidance, but the legal test is still the wording of section 75A itself, together with any wider case law and guidance.

Scroll down for the full analysis.

Section 75A SDLT: identifying the seller “V” and the purchaser “P”

This page explains the first gateway condition in section 75A of the SDLT rules. The point is simple in outline but important in practice: before section 75A can apply, you must identify the person who disposed of the land interest, called “V”, and the person who acquired it, or an interest derived from it, called “P”. HMRC’s manual makes clear that this is an objective exercise based on the actual scheme transactions. It is not a matter of discretion.

What this rule is about

Section 75A is an anti-avoidance provision aimed at certain arrangements involving land transactions. One of the first questions under that provision is whether, looking at the transactions that make up the arrangement, one person disposed of a chargeable interest and another person acquired that same interest, or an interest derived from it.

The legislation labels those two people “V” and “P”. Identifying them matters because the rest of the section works from that starting point. If you identify the wrong parties, the later analysis under section 75A may also go wrong.

What the official source says

The HMRC manual says the first condition in section 75A(1)(a) is that:

one person, “V”, disposes of a chargeable interest, and another person, “P”, acquires either:

• that chargeable interest, or
• a chargeable interest derived from it.

The manual also says that identifying V and P is an objective test that looks at the scheme transactions. HMRC say they do not have discretion in deciding who V and P are for section 75A purposes.

The manual further notes that where more than one party could potentially be “P”, there is separate guidance dealing with that issue.

What this means in practice

In practice, this means you do not start by asking who the parties intended to be treated as the seller and buyer for tax purposes, or who it would be convenient for HMRC to choose. You start with the actual transactions that form part of the arrangement.

You then ask:

• Who disposed of the original chargeable interest?
• Who ended up acquiring that interest, or an interest that comes from it?

If the arrangement contains several steps, intermediate transfers, or entities inserted between the original owner and the eventual acquirer, that does not stop the section 75A enquiry. The point of this first condition is to identify the relevant starting and ending parties by looking at the scheme as a whole.

The reference to an interest “derived from” the original chargeable interest is important. It shows that P does not necessarily have to acquire exactly the same legal interest that V disposed of. It may be enough that what P acquires comes out of, or is carved from, that original interest. The manual does not elaborate on the boundaries of that expression on this page, so the precise application may depend on the facts and on the wider section 75A material.

How to analyse it

A sensible way to analyse this condition is:

• Identify the scheme transactions. The manual says the test looks at those transactions, so you need to map the actual steps.
• Find the person who disposed of the relevant chargeable interest. That person is the candidate for V.
• Find the person who acquired either the same chargeable interest or one derived from it. That person is the candidate for P.
• Check whether there is more than one possible candidate for P. If so, this page indicates that further guidance is needed.
• Keep the exercise objective. The manual expressly says HMRC have no discretion here, so the answer should come from the facts of the transactions, not from preference or fairness.

When doing this, it helps to separate three different questions:

• What land interest existed at the start?
• What happened to that interest through the transaction steps?
• Who ended up with the relevant interest at the end?

This prevents confusion where there are sub-sales, assignments, nominees, lease structures, or other inserted steps.

Example

Illustration: A owns a freehold. A set of linked steps is entered into under which the freehold is first dealt with through intermediate parties, and the end result is that C acquires a lease granted out of that freehold. On the face of this page, the questions would be whether A is the person who disposed of the original chargeable interest and whether C acquired a chargeable interest derived from it. If so, A may be V and C may be P for the purpose of this first condition.

This example only illustrates the identification exercise. It does not mean section 75A necessarily applies overall, because the other statutory conditions would still need to be considered.

Why this can be difficult in practice

The main difficulty is that complex land arrangements often involve several parties and several interests. The original owner may transfer one form of interest, while the eventual acquirer receives something legally different but economically connected. That can make it hard to decide whether the later interest is the same interest or one “derived from” it.

Another difficulty is that more than one person may appear to be a possible end acquirer. This page itself recognises that issue by pointing to separate guidance on identifying P where there are multiple candidates.

A further practical point is that this page comes from HMRC’s manual, not the legislation itself. The manual is useful for understanding HMRC’s approach, but the legal test remains the one in section 75A. If the facts are unusual, the statutory wording and the wider case law and guidance may matter more than this short manual paragraph.

Key takeaways

• The first section 75A condition asks whether one person, V, disposed of a chargeable interest and another person, P, acquired that interest or one derived from it.
• Identifying V and P is an objective exercise based on the actual scheme transactions, not on HMRC discretion.
• Where there are multiple possible end acquirers, identifying P may require further analysis beyond this page.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Guide to Identifying “V” and “P” for Section 75A Compliance

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