Guide to Section 75A Scheme Transactions and Notional Land Transactions

SDLT section 75A: what counts as a scheme transaction

Section 75A can apply where a series of connected transactions results in land passing from the original seller to the ultimate buyer with less SDLT than a direct transfer. HMRC takes a broad view of what counts as a “scheme transaction”, so the analysis looks at the whole arrangement, including some non-land steps and even some later steps, not just the main land transfers.

• Scheme transactions are the transactions connected with the original owner’s disposal of the land interest and the ultimate buyer’s acquisition of that interest, or one derived from it.
• HMRC says the term should be interpreted widely, so the full factual and legal context must be considered rather than each step on its own.
• A transaction can still count even if it is not itself a land transaction, and it may still be relevant even if it happens after the buyer acquires the interest.
• Section 75A does not require any intention to avoid tax; it may apply even where the SDLT saving was accidental.
• If the rule applies, the actual land transactions in the arrangement may be ignored and replaced with a notional direct transaction from the original seller to the ultimate buyer.
• In practice, the difficult issues are identifying the original seller and ultimate buyer, deciding which steps are sufficiently connected, and working out the consideration for the notional transaction.

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SDLT section 75A: what counts as a “scheme transaction”

This page explains the second condition in SDLT section 75A(1)(b): whether there are one or more transactions connected with the seller’s disposal of land and the buyer’s acquisition of that land, or an interest derived from it. This matters because, if section 75A applies, HMRC may ignore the actual land transactions in the arrangement and instead charge SDLT on a notional transaction between the original seller and the ultimate buyer.

What this rule is about

Section 75A is an anti-avoidance provision, but its reach is not limited to cases where anyone intended to avoid tax. The rule asks whether, taken together, a series of transactions has the effect that land moves from one person to another in a way that reduces SDLT compared with a direct transfer.

The specific point covered here is what counts as the relevant set of transactions. Section 75A(1)(b) requires there to be a number of transactions connected with:

• the disposal of a chargeable interest by V, and
• the acquisition by P of that interest, or an interest derived from it.

Those connected transactions are called the “scheme transactions”.

Identifying the scheme transactions is important because they define the arrangement HMRC says should be looked at as a whole. They also affect who counts as V and P and what consideration is used for the notional land transaction.

What the official source says

HMRC’s manual says the phrase “scheme transactions” should be read widely. It relies on the decision in Project Blue Ltd v HMRC as supporting that broad approach.

On HMRC’s view, a transaction is a scheme transaction if it forms part of the context in which P acquires V’s chargeable interest, or an interest derived from it. In other words, the question is not limited to the immediate transfer documents. Any transaction involved in connection with the disposal by V and the acquisition by P can fall within the definition.

The manual also makes four practical points:

• You must look at the whole set of connected transactions, not each step in isolation.
• A transaction can still be a scheme transaction even if it happens after P acquires the interest.
• No tax avoidance motive is required. Section 75A can apply even where the SDLT saving was unintended.
• A scheme transaction does not have to be a land transaction.

Where one of the scheme transactions is itself a land transaction, section 75A(4) says it is disregarded for the purposes of this part and replaced by a notional land transaction. That notional transaction is treated as an acquisition by P of the chargeable interest disposed of by V.

What this means in practice

In practice, the scope of “scheme transactions” is potentially wide. You do not just ask, “What transfer of land took place?” You ask, “What transactions were involved in connection with the land moving from V to P?”

That can include steps that:

• set up the acquisition structure,
• sit between the original owner and the eventual acquirer,
• help bring about the acquisition of the land or a derived interest, or
• take place afterwards but still form part of the connected arrangement.

The result is that a person cannot assume section 75A is avoided merely because one step is not itself a land transaction, or because the transactions do not look like a single tax planning scheme. HMRC’s stated position is that the focus is on connection with the disposal and acquisition, not on motive.

If section 75A applies, the actual land transactions within the arrangement may be set aside for these purposes and replaced with a notional direct transaction from V to P. That can produce a different SDLT result from the one produced by the actual steps.

How to analyse it

A sensible way to analyse this issue is to work through the arrangement in stages.

• First, identify V: who disposed of the original chargeable interest?
• Second, identify P: who ultimately acquired that interest, or an interest derived from it?
• Third, list every transaction connected with that movement of the interest from V to P.
• Fourth, do not stop at land transfers. Include non-land steps if they are part of the context or mechanism by which P acquires the interest.
• Fifth, do not exclude a step simply because it happened after P’s acquisition. The legislation can still treat it as part of the scheme transactions.
• Sixth, consider the arrangement as a whole when identifying V, P, and the consideration for the notional transaction.

When asking whether a step is “in connection with” the disposal and acquisition, the key practical question is whether it forms part of the overall factual and legal setting in which P comes to acquire V’s interest, or one derived from it. HMRC’s approach is deliberately broad.

Example

Illustration: A owns land. Through a series of pre-planned steps, the economic result is that B ends up with A’s land, or a right derived from it, but the route involves intermediate transactions and one of the steps is not itself a land transaction. One later step also happens after B has acquired the interest.

On the approach described in the manual, the analysis would not be limited to the transfer to B. The intermediate steps, the non-land step, and potentially the later step may all be examined as possible scheme transactions if they are involved in connection with A’s disposal and B’s acquisition. If section 75A applies, the land transactions in that set may be disregarded and replaced with a notional direct acquisition by B from A.

Why this can be difficult in practice

The main difficulty is the breadth of the connection test. The manual indicates that transactions forming part of the “context” of the acquisition can count. That is a wide concept and can be fact-sensitive.

Several points can be difficult:

• How far the surrounding factual context extends.
• Whether a later transaction is sufficiently connected to be included.
• Whether a transaction that is not a land transaction nevertheless forms part of the relevant arrangement.
• How to identify V and P where there are several parties and multiple steps.
• How the totality of the transactions affects the consideration for the notional land transaction.

The source material also reflects HMRC’s interpretation of the legislation and of Project Blue. The statute is the legal starting point, and the significance of any case depends on its facts and reasoning. In practice, section 75A issues often turn on the full structure of the arrangement rather than on any single step viewed alone.

Key takeaways

• “Scheme transactions” under section 75A are not limited to the obvious land transfers and may include non-land steps and later steps.
• HMRC’s view is that the term should be read broadly, with the whole arrangement considered together.
• Section 75A does not require a tax avoidance motive; it can apply even where the SDLT reduction was unintended.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Guide to Section 75A Scheme Transactions and Notional Land Transactions

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