Guide on Relief Availability for Notional Transactions Between Group Companies

SDLT reliefs for a section 75C notional land transaction

Where section 75C deems there to be a notional land transaction between V and P, any SDLT relief that would have applied to a real transaction may reduce the chargeable consideration. However, relief is not automatic: the deemed transaction must meet all the normal statutory conditions, restrictions and anti-avoidance rules for the relevant relief.

• Section 75C can create a deemed land transaction between V and P even where no direct transfer actually took place.
• When working out SDLT on that notional transaction, you can take account of any relief that would have been available on an actual transaction.
• Each relief must be tested in the usual way, including its detailed conditions, exclusions, timing rules and withdrawal provisions.
• Group relief may apply if V and P are in the same group, but only if the normal Schedule 7 Finance Act 2003 rules are satisfied.
• Group relief will be blocked if, at the effective date, there are arrangements for someone to obtain control of P but not V.
• In practice, you should first identify the notional transaction and then separately check whether any SDLT relief fits the deemed facts.

Scroll down for the full analysis.

Reliefs on a section 75C notional land transaction

This page explains a narrow but important SDLT point. Where section 75C requires you to treat there as being a notional land transaction between V and P, the chargeable consideration for that deemed transaction can be reduced by any SDLT relief that would have been available if the transaction had actually taken place. The key point is that the relief is not automatic. You must test the notional transaction against the normal conditions and restrictions for the relief in question.

What this rule is about

Section 75C is part of the SDLT rules that can deem a transaction to exist even though the parties did not actually complete that direct land transfer in the ordinary way. In this context, the legislation treats there as being a notional transaction between V and P.

The issue addressed by this HMRC manual page is how to calculate the consideration for that deemed transaction. In particular, it deals with whether SDLT reliefs can be taken into account when working out the tax position on the notional transaction.

This matters because a deemed transaction is still analysed using SDLT principles. If a relief would have applied had the deemed transaction been a real one, that relief may reduce or eliminate the SDLT charge. But the fact that the transaction is notional does not relax the normal statutory requirements for the relief.

What the official source says

HMRC states that, when calculating the consideration for the notional transaction between V and P, P may take account of any relief that would have been available if the notional transaction had been an actual transaction.

HMRC also makes clear that the availability of a relief depends on the terms of that relief. In other words, you do not ask simply whether the parties would like the relief to apply. You ask whether the notional transaction satisfies the actual statutory conditions for that relief, including any exclusions, anti-avoidance rules, or timing rules.

The manual gives group relief as an example. A notional transaction between V and P may qualify for group relief if both are companies in the same group, but only if the normal rules in Schedule 7 to Finance Act 2003 are met. HMRC highlights one restriction in particular: if, at the effective date of the notional transaction, there are arrangements for someone to obtain control of P but not V, group relief will not be available.

What this means in practice

The practical effect is that a section 75C analysis does not stop once you identify the deemed transaction. You must then consider whether any SDLT relief applies to that deemed transaction on its own facts.

This can be helpful where the notional transfer is between companies in the same group, or where some other relief might potentially apply. But you must examine the relief exactly as you would for a real land transaction. The notional character of the transaction does not create a special version of the relief.

For taxpayers and advisers, this means two separate stages:

• first, identify the notional transaction required by section 75C and the consideration attributable to it;
• second, test whether any relief would have applied if that notional transaction had actually happened.

If the answer to the second question is yes, the relief can be taken into account in calculating the SDLT position. If the answer is no, the notional transaction is taxed without that relief.

How to analyse it

A sensible way to approach this point is to ask the following questions:

• What exactly is the notional transaction between V and P that section 75C requires you to assume?
• Who are the parties to that deemed transaction, and what is the effective date for SDLT purposes?
• Which reliefs might be relevant if that assumed transaction had really taken place?
• Do the statutory conditions for that relief actually fit the deemed facts?
• Are any restrictions, withdrawal rules, or anti-avoidance provisions triggered?
• Is there anything in place at the effective date that would block the relief, such as arrangements affecting control in the case of group relief?

This framework matters because relief analysis is often highly specific. It is not enough that the parties are broadly connected in a way that suggests a relief might exist. The exact legal conditions must be checked against the assumed transaction created by section 75C.

Example

Illustration: Company V and Company P are members of the same group. Section 75C treats there as being a notional land transaction between them. At first sight, that suggests group relief may be available.

However, suppose that at the effective date there are arrangements for another person to obtain control of P, but there are no equivalent arrangements affecting V. On HMRC’s approach, the normal Schedule 7 restrictions still apply to the notional transaction. In that case, group relief would not be available, even though V and P are currently in the same group.

The example shows the main point of the manual: reliefs can apply to notional transactions, but only on their ordinary statutory terms.

Why this can be difficult in practice

The difficult part is often not the basic principle but the interaction between a deemed transaction and a relief with detailed conditions. Some reliefs depend on matters such as group membership, control, arrangements in place at a particular time, or other surrounding facts. Those questions can become more technical when the transaction being tested is one that the legislation deems to exist.

Another difficulty is that HMRC’s manual is guidance, not the legislation itself. The underlying legal answer depends on section 75C and the wording of the relevant relief. In most cases the manual’s statement is straightforward: apply the relief rules to the notional transaction as if it were real. But the detailed outcome can still be fact-sensitive, especially where anti-avoidance restrictions are involved.

Key takeaways

• A section 75C notional transaction can potentially benefit from SDLT reliefs.
• The relief must be tested using its normal statutory conditions and restrictions, as if the deemed transaction were an actual one.
• For group relief, arrangements affecting control at the effective date may prevent relief, even on a notional transaction.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Guide on Relief Availability for Notional Transactions Between Group Companies

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