Understanding ‘Involved in Connection With’ for Stamp Duty Land Tax Transactions

When a transaction is treated as connected with a land transfer under SDLT section 75A

Under HMRC’s view of SDLT section 75A, a transaction may be treated as connected with a land transfer if it forms part of the arrangement by which land passes from the seller to the buyer, or if it affects the SDLT result. The test is broad and fact-specific: a step does not need to be the actual land transfer, but it must do more than simply appear in the same sequence of events.

• Section 75A looks at cases where land moves from one person to another through a series of transactions and the SDLT outcome may not reflect the overall arrangement.
• A transaction can be caught if it helps bring about the transfer, forms part of the context for the buyer’s acquisition, or affects the SDLT payable.
• It is not enough that a step happens in the same chain of events; a mere sequence of transactions does not automatically make it a connected scheme transaction.
• If the overall result could not realistically be achieved without a particular step, or if the steps are commercially interdependent, HMRC is likely to see that step as connected.
• Relevant factors include planning, timing, purpose, the relationship between the steps, and the role each transaction played in the land transfer or tax outcome.
• HMRC’s manual explains its approach, but the legal test still depends on the wording of section 75A and the facts of the case.

Scroll down for the full analysis.

When is a transaction “involved in connection with” a land transfer for SDLT section 75A?

This page explains how HMRC approaches the phrase “involved in connection with” in section 75A(1)(b) of the SDLT rules. This matters because, if a transaction is treated as being involved in connection with the disposal by one person and the acquisition by another, it may be counted as a “scheme transaction” for the purposes of the SDLT anti-avoidance rule in section 75A.

What this rule is about

Section 75A is aimed at certain arrangements where land moves, directly or indirectly, from one person to another through a series of transactions, and the SDLT result may not reflect the overall effect of what has happened.

The provision looks at a disposal of a chargeable interest by one person, usually described as V, and an acquisition of that interest, or one derived from it, by another person, usually described as P. It then asks whether there are other transactions that are “involved in connection with” that disposal and acquisition. If there are, those transactions may form part of the wider scheme considered under section 75A.

The phrase is broad. It is not limited to the actual transfer document. It can extend to steps that help bring about the overall result, or that affect the SDLT outcome.

What the official source says

HMRC’s manual says that transactions involved in connection with V’s disposal and P’s acquisition are scheme transactions.

It gives examples of transactions that may fall within that description:

• transactions that affect the transfer of the chargeable interest between V and P
• transactions that form part of the context in which P acquires V’s chargeable interest, or an interest derived from it
• transactions that affect the SDLT payable

The manual also says that a transaction is not automatically “involved in connection with” just because it appears in a series of successive transactions. A mere sequence is not enough by itself.

However, HMRC says that if the overall outcome could not be achieved without a particular step, that step is likely to satisfy the test. The reason given is that such a step forms part of the context by which V’s chargeable interest, or one derived from it, is transferred to P.

HMRC also says that where two or more transactions are commercially interdependent, they are likely to be involved in connection with the disposal and acquisition.

Finally, the manual says that the question must be answered by looking at all the facts surrounding P’s acquisition. Relevant factors include:

• the planning involved
• the relationship of the step to the disposal and/or acquisition
• the proximity of the transaction steps
• the reasons for carrying out a particular step and the overall intent

What this means in practice

The practical point is that you should not look only at the final transfer into P’s hands. You need to look at the whole arrangement and ask which steps genuinely form part of the mechanism or setting by which the land moved from V to P, or by which the SDLT position was shaped.

A step may be relevant even if it does not itself transfer the land. For example, a step may still matter if it makes the transfer possible, changes what is acquired, or affects the tax result.

At the same time, not every step in a wider commercial sequence will be caught. Some transactions may sit in the background without being sufficiently connected. HMRC’s own wording recognises this by saying that being part of a sequence does not automatically make a transaction a scheme transaction.

So the real question is one of connection and function. What role did the transaction play in the movement of the chargeable interest from V to P, or in the SDLT effect of the arrangement?

How to analyse it

A sensible way to analyse the point is to work through the arrangement step by step.

• Identify V, the person disposing of the chargeable interest.
• Identify P, the person who ends up acquiring that interest, or an interest derived from it.
• List every transaction that forms part of the wider arrangement, not just the land transfer itself.
• Ask what each step actually does. Does it transfer the land, prepare the transfer, alter the rights being transferred, or affect the SDLT payable?
• Ask whether the overall outcome could have been achieved without that step. If not, HMRC is likely to regard it as involved in connection with the disposal and acquisition.
• Ask whether the transactions are commercially interdependent. If one step only makes sense because the others happen, that points towards connection.
• Consider timing and planning. Closely planned and closely timed steps may be easier to view as connected than isolated events with independent purposes.
• Consider purpose and overall intent. Why was the step included? Was it inserted to bring about the acquisition, to structure the route by which the land moved, or to affect the SDLT result?

This is not a mechanical checklist. HMRC’s manual makes clear that all the facts matter, and the listed factors are not exhaustive.

Example

This is only an illustration of the approach, not a statement of any concluded tax outcome.

Suppose V owns land and P ends up with it, but the land passes through several planned steps before reaching P. One of those steps does not itself transfer the land to P, but it is necessary to create the structure through which P can acquire the interest and it also affects the SDLT position. On HMRC’s approach, that step is likely to be treated as involved in connection with V’s disposal and P’s acquisition, because the arrangement could not achieve its result without it.

By contrast, if there is another transaction in the background that happened around the same time but was not needed for P to acquire the land and did not materially shape the SDLT outcome, there is a stronger argument that it is merely part of the wider chronology rather than a connected scheme transaction.

Why this can be difficult in practice

The phrase “involved in connection with” is broad and fact-sensitive. The difficult cases are usually those where a step is not itself a transfer of land, but is said to be part of the context or part of the tax effect.

Several points can make the analysis difficult:

• The boundary between a genuinely connected step and a merely adjacent step is not always obvious.
• Commercial interdependence can be a matter of degree. Transactions may influence each other without being truly dependent.
• The significance of timing can vary. Steps close together are not necessarily connected, and steps further apart may still be connected if they were part of one planned arrangement.
• Purpose matters, but purpose can be mixed. A step may have both commercial and tax consequences.

It is also important to distinguish HMRC’s manual from the legislation itself. The manual explains HMRC’s view of how the test should be applied. The legal question remains what section 75A means on the facts of the case.

Key takeaways

• A transaction can be relevant under section 75A even if it is not the direct transfer of the land.
• Being part of a sequence is not enough on its own, but a necessary or commercially interdependent step is likely to be treated as connected.
• The analysis depends on all the facts, including planning, timing, purpose, and the role the step played in the acquisition and SDLT outcome.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Understanding ‘Involved in Connection With’ for Stamp Duty Land Tax Transactions

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