Understanding Section 75C: Property Investment Partnerships and Chargeable Interests in Land

SDLT Section 75A and Transfers of Interests in Property Investment Partnerships

HMRC says that transferring an interest in a property investment partnership can fall within the SDLT anti-avoidance rules in section 75A where the partnership owns land. This is because the partnership interest may be treated as a chargeable interest to the extent it relates to that land, even if no land is directly transferred.

• Section 75A is designed to look at the real effect of arrangements, not just their legal form.
• A partnership interest may count as a chargeable interest for SDLT purposes where it reflects land held by the partnership.
• So, transferring an interest in a property investment partnership is not automatically outside section 75A just because it is a partnership transaction rather than a land transfer.
• The key questions are whether the partnership is a property investment partnership, whether it owns chargeable land, and how far the transferred interest relates to that land.
• If the partnership holds both land and other assets, it may be necessary to work out how much of the transferred interest concerns the land element.
• HMRC’s manual shows HMRC’s view, but the final legal position depends on the legislation and any relevant case law.

Scroll down for the full analysis.

Transfers of interests in property investment partnerships and SDLT section 75A

This page explains why a transfer of an interest in a property investment partnership can fall within the SDLT anti-avoidance rules in section 75A. The point matters because a person may think they are only transferring a partnership interest, rather than land itself, but HMRC’s view is that the transaction can still involve a chargeable interest to the extent the partnership owns land.

What this rule is about

Section 75A is an anti-avoidance provision in the SDLT rules. It is designed to look beyond the formal steps of a transaction where land is effectively transferred through a series of arrangements.

The source material deals with a specific question: what happens if the asset being transferred is not the land directly, but an interest in a property investment partnership?

The key issue is that a partnership interest can represent, in substance and for SDLT purposes, an interest in land held by the partnership. If that is right, the transfer may come within the scope of section 75A.

What the official source says

The HMRC manual states that, when considering section 75A, an interest in a property investment partnership is a chargeable interest so far as it relates to land owned by the partnership.

It follows, on HMRC’s view, that if a person transfers an interest in a property investment partnership and the partnership has relevant partnership property that includes a chargeable interest, that transfer is within the scope of section 75A.

The manual also points readers to HMRC’s separate material on transfers of interests in property investment partnerships.

What this means in practice

The practical effect is that you cannot assume SDLT anti-avoidance rules are avoided simply because the transaction is structured as a transfer of a partnership interest rather than a direct transfer of land.

If the partnership owns land, the partnership interest may itself be treated as involving a chargeable interest, at least to the extent that the interest reflects the underlying land.

This does not mean every transfer of a partnership interest will automatically trigger an SDLT charge under section 75A. Section 75A has its own conditions and applies in a particular anti-avoidance context. But the manual makes clear that this type of transaction is capable of falling within that regime.

For taxpayers and advisers, the important point is one of scope. A transfer of a partnership interest is not outside section 75A merely because the legal form of the transaction is a partnership disposal rather than a conveyance of land.

How to analyse it

A sensible way to approach the issue is to ask the following questions.

• Is the entity a property investment partnership for these purposes?
• Does the partnership own land that is a chargeable interest for SDLT purposes?
• Is there a transfer of an interest in that partnership?
• To what extent does the transferred partnership interest concern the land owned by the partnership?
• Are the wider conditions for section 75A potentially in point, having regard to the overall arrangements and their effect?

The source material is focused on the first step in that analysis: whether the subject matter of the transfer can be treated as a chargeable interest at all. HMRC’s answer is yes, so far as the partnership interest relates to land held by the partnership.

That means the next stage is not to stop at legal form. You need to consider the underlying partnership property and how the transferred interest connects with it.

Example

Illustration: A partnership holds an investment property. Instead of transferring the property itself, one partner transfers part of their interest in the property investment partnership to a buyer. On the face of it, the buyer is acquiring a partnership stake, not the land title. HMRC’s published view is that, for section 75A purposes, that partnership interest is a chargeable interest to the extent it concerns the land owned by the partnership. That means the transaction can fall within the scope of section 75A.

Why this can be difficult in practice

The manual statement is short, but the underlying analysis can be fact-sensitive.

First, the treatment depends on the transaction being an interest in a property investment partnership, not just any commercial arrangement involving a partnership.

Second, the manual says the partnership interest is a chargeable interest only “as far as it concerns” land owned by the partnership. That wording suggests an important limitation. If the partnership holds a mixture of land and other assets, it may be necessary to consider how far the transferred interest relates to the land element.

Third, being within the scope of section 75A is not the same as saying section 75A will definitely impose a charge in every case. Section 75A is a specific anti-avoidance rule with its own statutory requirements. The source page does not set those requirements out in full.

Finally, HMRC’s manual is HMRC’s published interpretation. The legal effect ultimately depends on the legislation and, where relevant, case law. The manual is useful for understanding HMRC’s approach, but it is not itself the law.

Key takeaways

• HMRC treats an interest in a property investment partnership as a chargeable interest for section 75A purposes, so far as it relates to land owned by the partnership.
• A transfer of a partnership interest can therefore fall within the scope of SDLT anti-avoidance rules, even if no land is directly conveyed.
• The analysis depends on the underlying partnership property, the extent to which the interest concerns land, and whether the wider conditions of section 75A are met.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Understanding Section 75C: Property Investment Partnerships and Chargeable Interests in Land

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