Fairly splitting a payment under SDLT anti-avoidance rules
In brief
Where the SDLT anti-avoidance rule applies, a payment that covers more than one land right may need a fair split.
- Do not assume the whole payment relates to one right
- Use a just and reasonable allocation
- Keep evidence supporting the split
Scroll down for the full analysis.
Read the original guidance here:
Fairly splitting a payment under SDLT anti-avoidance rules
Stamp duty land tax can use a made-up transaction where a series of deals produces too little tax. Where one payment covers several land rights, the law calls for a fair split, so the amount used for tax reflects what that payment actually covers. That split can affect the amount used for tax.
What this rule is about
Section 75A is an anti-avoidance rule. It can replace connected steps with a notional transaction where the rule applies to the arrangements and treats that transaction as having happened for SDLT. That transaction is notional.
Section 75C(5) addresses a narrow problem: one amount can relate partly to the land right P gets and partly to another land right.
What the official source says
HMRC’s manual allows fair apportionment. When applying section 75A(5), the legislation requires the amount, where it relates both to the land right P acquires and to another land right, to be split on a just and reasonable basis. The split must be fair.
- Section 75A must first apply to the arrangements.
- A notional transaction must then arise under that rule.
- One amount must relate partly to the land right P acquires.
- That same amount must also relate partly to another land right.
- The amount must be split on a just and reasonable basis.
What this means in practice
You should not automatically treat the whole payment as payment for the land right P gets. First work out what the payment genuinely covers.
- Read the contract and any side agreements.
- Identify every land right covered by the payment.
- Keep evidence that supports the proposed split.
How to analyse it
Start with the wider anti-avoidance rule. Then focus on the payment, rather than the labels the parties used.
- Does section 75A apply to the series of arrangements?
- What is the largest relevant amount under section 75A(5)?
- Which part relates to the land right P gets?
- Which part relates to another land right?
- Does the proposed split reflect the evidence fairly?
Example
For illustration, a £600,000 payment covers two separate land rights. Evidence supports £450,000 for the right P gets and £150,000 for the other right. A just and reasonable split would use the relevant £450,000 part when applying the rule, rather than simply using all £600,000.
Why this can be difficult in practice
The statute gives no fixed formula. A fair split can require values, contractual terms, and evidence showing what the parties actually paid for, particularly where the payment formed part of a wider package deal. Evidence matters.
- A contract price alone may not explain each part of a package deal.
- Calling part of a payment something else does not settle the issue.
- HMRC’s manual does not say which valuation method always works.
Key takeaways
- This rule applies within the SDLT anti-avoidance regime.
- Split a mixed payment fairly between the relevant land rights.
- Documents and valuation evidence may decide the result.
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 — conditions for the anti-avoidance rule to apply; creates a notional land transaction for tax; sets the amount used for notional transaction
- FA 2003 section 75C — requires fair allocation between separate land interests
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
- What is just and reasonable depends on the facts, documents and commercial purpose of the payment.
- The HMRC manual page gives no detailed method for choosing an allocation.
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 agreements showing what each payment covers
- Completion statements and payment records
- Valuations or other evidence supporting the proposed split
- Documents identifying each separate land right 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 Fairly splitting a payment under SDLT anti-avoidance rules [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 - conditions for the anti-avoidance rule to apply https://www.legislation.gov.uk/ukpga/2003/14/section/75A/2025-11-17 - FA 2003 section 75A - creates a notional land transaction for tax https://www.legislation.gov.uk/ukpga/2003/14/section/75A/2025-11-17 - FA 2003 section 75A - sets the amount used for notional transaction https://www.legislation.gov.uk/ukpga/2003/14/section/75A/2025-11-17 - FA 2003 section 75C - requires fair allocation between separate land interests 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/sdltm09330 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 - What is just and reasonable depends on the facts, documents and commercial purpose of the payment. - The HMRC manual page gives no detailed method for choosing an allocation. 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 31 August 2026
Useful article? You may find it helpful to read the original guidance here: Fairly splitting a payment under SDLT anti-avoidance rules
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