When some property payments are ignored in an SDLT anti-avoidance check
Payments left out of a section 75A calculation
Some payments linked to exempt or relieved property steps are ignored when working out the amount for a section 75A notional transaction. The step itself may still be part of the wider arrangement.
- This is a calculation rule, not a complete exemption from section 75A.
- Test the exemption or relief on its own terms.
- Check current legislation where the HMRC manual and statute differ.
Scroll down for the full analysis.
Read the original guidance here:
When some property payments are ignored in an SDLT anti-avoidance check
When some property payments are ignored in an SDLT anti-avoidance check
When taxpayers work out stamp duty land tax, or SDLT, under a special anti-avoidance rule, they can leave out some payments. That does not make the related property step disappear. It may still matter as part of the wider arrangement.
What this rule is about
Section 75A can apply where several linked property steps produce a lower SDLT result than a direct sale might have produced. When it applies, the law creates a notional transaction. That means a made-up direct property transfer for tax purposes.
One key part is the amount paid for that made-up transfer. Section 75C(4) tells taxpayers to ignore some payments when they work out that amount.
This is a limited rule. It does not decide whether the anti-avoidance rule applies in the first place.
What the official source says
HMRC’s manual says that this part of the calculation leaves out payments for steps covered by certain exemptions or reliefs. The list includes steps under the following parts of the SDLT law:
- compulsory purchase that helps another person develop land
- a transfer needed to meet a planning obligation
- an insurance company becoming a different type of business
- a building society becoming a company
- an LLP becoming a company
- transfers involving public bodies
- a transfer caused by changes to parliamentary boundaries
- purchases by bodies set up for national purposes
- some purchases by social housing providers
- collective rights used by flat tenants
- the crofting community right to buy
- relief for certain residential property purchases
- charities relief
The important warning comes at the end of the manual page: the step can still be part of the wider plan. In the law’s language, it may still be a scheme transaction. Put simply, section 75A can still examine it as one of the steps.
What this means in practice
You should not assume that a tax-free step has no role in the overall SDLT review. You may leave it out when working out the payment total, but it can still show how the property moved from the original owner to the final buyer.
That distinction sounds small. It can change the tax result.
- First, check whether section 75A is in point at all.
- Then identify every property step in the arrangement.
- Check whether one step falls within a listed exemption or relief.
- If it does, leave its payment out of the section 75A(5) amount.
- Do not remove that step from the wider fact pattern.
- Keep records that show why the exemption or relief applied.
How to analyse it
Start with events, not labels. Who transferred what, to whom, and for how much? A clear timeline often shows the issue.
- List each contract, transfer and payment in date order.
- Identify the original owner and the person who ends up with the property.
- Ask whether the steps form one arrangement for section 75A.
- Decide whether you must consider a notional transaction.
- Test any claimed exemption or relief under its own rules.
- Separate the payment for a qualifying step from other payments.
- Use section 75C(4) when setting the amount for the made-up transfer.
- Check that the answer still reflects every relevant step in the arrangement.
Example
Imagine a charity paying £200,000 for land as one step in a larger arrangement. Assume the charity step qualifies for charities relief and that section 75A applies to the arrangement. Under section 75A(5), leave the £200,000 out when setting the amount for the made-up transfer.
That does not end the review. Section 75A may still consider charity purchase. These facts alone do not establish an SDLT rate.
Why this can be difficult in practice
People often focus only on the final transfer. That can be the wrong place to start. Section 75A looks at a wider set of steps, while section 75C(4) deals only with selected payments within the later calculation.
HMRC’s page also needs care. It was introduced in January 2020. The supplied current text of section 75C(4) does not match every item in HMRC’s list.
- A valid relief is not the same as being outside section 75A.
- A payment left out of one calculation can still be relevant evidence.
- The facts behind a relief claim must be checked separately.
- The manual names section 75; the supplied current statute instead refers to section 74 and Schedule 7A.
- For a later transaction, check the live legislation as well as the manual.
Key takeaways
- Section 75C(4) can leave specified payments out of a section 75A calculation.
- The related property step can still be part of the overall arrangement.
- Check the current statute because the manual’s list may not match it fully.
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 — sets the amount for the notional transaction
- FA 2003 section 75C — ignores specified exempt and relieved transaction payments
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
- The supplied HMRC page includes section 75, but the bundled current text of section 75C(4) refers to section 74 and Schedule 7A instead. The current official legislation should be checked before relying on the manual’s list.
- The supplied statutory text is current only to 17 November 2025. A transaction after that date needs a current-law check.
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 or list showing every step in the arrangement.
- The contracts, transfers and payment records for each step.
- Evidence that the claimed exemption or relief applied to the relevant step.
- The dates of all steps and the parties involved.
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 some property payments are ignored in an SDLT anti-avoidance check [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 - sets the amount for the notional transaction https://www.legislation.gov.uk/ukpga/2003/14/section/75A/2025-11-17 - FA 2003 section 75C - ignores specified exempt and relieved transaction payments 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/sdltm09320 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 - The supplied HMRC page includes section 75, but the bundled current text of section 75C(4) refers to section 74 and Schedule 7A instead. The current official legislation should be checked before relying on the manual's list. - The supplied statutory text is current only to 17 November 2025. A transaction after that date needs a current-law check. 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 some property payments are ignored in an SDLT anti-avoidance check
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