Stamp duty and company de-enveloping: HMRC’s section 75A example
In short
HMRC’s example says that section 75A does not apply where a person buys all shares in a debt-free company and then receives its properties, with no other steps planned.
- The share purchase is ignored under section 75C(1).
- HMRC says only one relevant property step then remains.
- The answer can change if the facts include further connected arrangements.
Scroll down for the full analysis.
Read the original guidance here:
Stamp duty and company de-enveloping: HMRC’s section 75A example
Stamp duty and company de-enveloping: HMRC’s example
HMRC says its example does not engage the stamp duty anti-avoidance rule in section 75A.
The buyer first acquires a company’s shares and then receives its three properties directly. For this particular test, HMRC excludes the share purchase.
What this rule is about
A company can hold property. A person may buy the company, rather than the property itself, and later transfer the property directly into their own name after acquiring the shares. This is sometimes called de-enveloping.
Section 75A may apply when a series of linked steps, which HMRC considers together rather than separately, produces a lower SDLT outcome than a direct property purchase would produce. That comparison matters.
The final transfer is not, by itself, decisive. The entire chain may be relevant.
What the official source says
HMRC’s manual includes an example involving Todderick, Galactus Five Limited, and three London properties that the company has owned for years, free of debt, before Todderick buys all its shares. Those facts frame the example.
- Todderick buys all the company’s issued shares.
- He later receives the three properties in his own name.
- No further steps take place or are planned.
- The company remains dormant after the properties move out.
- HMRC says the share purchase is ignored under section 75C(1).
- HMRC then says only the property distribution remains relevant.
- Its view is that the multiple-steps requirement in section 75A is not met.
What this means in practice
On these stated facts, HMRC says that section 75A is not engaged. That conclusion is narrow.
This does not mean that a buyer who acquires shares and later receives company property will always fall outside the rule where further planned or connected steps form part of the arrangement. The facts remain important.
What decides the issue in practice? It is the steps that make up the arrangement. A single extra linked step can alter the picture.
- List every step before and after the share purchase.
- Check whether the company had debt at each stage.
- Check whether money, assets, or rights move between the parties.
- Record plans made before the shares are bought.
- Do not assume a dormant company ends the analysis.
How to analyse it
Start with the facts, rather than the label attached to the arrangement. HMRC’s conclusion follows from a short and specific sequence of steps.
- Identify who owned the properties at the start.
- Identify exactly what the buyer bought first.
- Set out each later transfer in date order.
- Ask whether the share purchase would be the first connected step.
- Apply the rule that can ignore that initial share transfer.
- Count the relevant property steps left after doing so.
- Check whether any unstated arrangement links further steps together.
Example
In HMRC’s example, Todderick buys 100% of the shares in a company holding three properties. The company has no debt.
It then gives him all three properties, and the parties plan no other step. HMRC ignores the share purchase for this test.
Once HMRC ignores the share purchase for this test, it treats the property distribution as the only relevant remaining step, so section 75A does not apply on those facts. That is HMRC’s conclusion.
Why this can be difficult in practice
People often begin with the final property transfer. That may be the wrong place to start. The difficult question is whether a wider planned series of connected steps existed.
HMRC’s manual is guidance rather than the law itself. It shows HMRC’s view of this example, but the legislation and the real documents remain decisive.
- A loan, debt release, or payment may be relevant.
- An earlier plan can matter even if it is not written into one document.
- A later step may still be linked to the original arrangement.
- Similar-looking company structures can have different facts.
Key takeaways
- HMRC says section 75A does not apply to its stated example.
- The initial share purchase is ignored for this specific test.
- Extra planned or connected steps may lead to a different answer.
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 — requirement for multiple connected scheme transactions
- FA 2003 section 75C — ignores an initial share transfer in some schemes
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
- A different result may follow if there are extra connected steps, debt, or arrangements not stated in the example.
- The source gives no dates or documents for an actual transaction, so its application to a real arrangement is fact-sensitive.
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.
- share purchase agreement and company records
- documents transferring the properties out of the company
- evidence of any borrowing or debt connected with the steps
- records showing whether further connected steps were planned
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 Stamp duty and company de-enveloping: HMRC’s section 75A example [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 - requirement for multiple connected scheme transactions https://www.legislation.gov.uk/ukpga/2003/14/section/75A/2025-11-17 - FA 2003 section 75C - ignores an initial share transfer in some schemes 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/sdltm09380 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 - A different result may follow if there are extra connected steps, debt, or arrangements not stated in the example. - The source gives no dates or documents for an actual transaction, so its application to a real arrangement is fact-sensitive. 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: Stamp duty and company de-enveloping: HMRC’s section 75A example
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