Stamp duty when a property partnership transfers homes to a company
In short
HMRC says that section 75A does not apply where partners buy a company and transfer partnership property into it on the facts of this example.
- The share purchase is ignored for this section 75A test.
- The partnership rules in Schedule 15 calculate the SDLT amount.
- Ownership shares, debts and documents can change the answer.
Scroll down for the full analysis.
Read the original guidance here:
Stamp duty when a property partnership transfers homes to a company
Stamp duty when a property partnership transfers homes to a company
Moving a letting business into a company does not automatically bring in the SDLT anti-avoidance rule. In HMRC’s example, HMRC leaves the share purchase out of this test. The special rules for partnership property then work out the stamp duty.
What this rule is about
Friends may place a letting business into a company. They may buy an unused company and move the properties into it.
When the friends buy an unused company, then transfer the properties to it, and retain the same ownership shares afterwards, they may need to consider the SDLT anti-avoidance rule. That rule is section 75A.
The result depends on who owns the business before and after the transfer. In the official example, the same three people remain behind the business.
What the official source says
HMRC’s manual states that section 75A is not applicable on these facts. Section 75C(1) says HMRC ignores the purchase of the company’s shares for this purpose. It is the first step in the series.
- Nina, Ophelia and Penny have run a letting business through a partnership.
- They buy all the shares in an unused company.
- The partnership gives its properties to that company.
- Once HMRC ignores the share purchase, it sees a transfer from the partnership to a company owned by those same people.
What this means in practice
The transfer may still face stamp duty. The special partnership calculation applies instead of section 75A.
The relevant calculation measures the proportion of the property that former partners continue to own, whether directly or through the company. That is the test that matters.
- Do not assume that no cash price means no SDLT amount.
- Do not assume that incorporation always falls within section 75A.
- Check the partnership shares before the transfer. Then check who owns the company.
How to analyse it
Begin with the actual steps rather than the label attached to the plan. The documents and ownership records matter more than calling the deal an incorporation.
- List every step, including the share purchase and property transfer.
- Check which properties belonged to the partnership.
- Check who owned the partnership and their profit shares.
- Check who owns the company immediately after the transfer.
- Identify any mortgage debt, payment or other value given.
- Use the Schedule 15 calculation for the transfer from the partnership.
Example
Take HMRC’s example, but assume the three partners each had one-third of the partnership and each owns one-third of the company.
If Schedule 15 treats each partner’s kept share in full, and each of the three partners keeps one-third through the company, the three lower proportions total 100%. That is full retention.
The statutory formula can then cut the amount used for SDLT to nil. A different split can give a different answer.
Why this can be difficult in practice
Matching names alone may appear sufficient. They are not.
The calculation considers ownership shares, earlier partnership changes, and the statutory rules about connected people, while company debt and agreements outside the transfer deed may also alter the position. These details matter.
- Profit shares may differ from the partners’ capital shares.
- Company shares may not match the old partnership shares.
- A person connected with a partner can affect the calculation.
- Earlier changes in partnership ownership can matter.
Key takeaways
- HMRC treats this as a narrow incorporation example.
- HMRC can ignore the share purchase for the section 75A test.
- Schedule 15, not a simple cash-price test, then works out the SDLT amount.
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 — anti-avoidance rule for linked land transaction arrangements
- FA 2003 section 75C — ignores a first share transfer in some arrangements
- FA 2003 section 104 — applies the special stamp duty rules for partnerships
- FA 2003 Schedule 15 para 18 — works out the amount for property leaving a partnership
- FA 2003 Schedule 15 para 20 — calculates retained ownership proportions after a partnership transfer
- FA 2003 Schedule 15 para 21 — sets the partnership share used in that calculation
- FA 2003 Schedule 15 para 37 — defines when property has left a partnership
- FA 2003 Schedule 15 para 39 — applies connection rules to partnership transfer calculations
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 source does not give the partners’ exact profit shares, the company’s share ownership, property values, debts or transfer documents.
- A different ownership split, a new owner, connected persons, borrowing, or other linked steps can change the result.
- The effective date is not given, so the law in force on that date must be checked.
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.
- The partnership agreement and each partner’s profit-sharing percentage
- The company share register and incorporation documents
- The property transfer documents and any related agreements
- Details of mortgages, debts and other value moving between the parties
- The transaction’s effective date
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 when a property partnership transfers homes to a company [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 - anti-avoidance rule for linked land transaction arrangements https://www.legislation.gov.uk/ukpga/2003/14/section/75A/2025-11-17 - FA 2003 section 75C - ignores a first share transfer in some arrangements https://www.legislation.gov.uk/ukpga/2003/14/section/75C/2025-11-17 - FA 2003 section 104 - applies the special stamp duty rules for partnerships https://www.legislation.gov.uk/ukpga/2003/14/section/104/2025-11-17 - FA 2003 Schedule 15 para 18 - works out the amount for property leaving a partnership https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/18/2025-11-17 - FA 2003 Schedule 15 para 20 - calculates retained ownership proportions after a partnership transfer https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/20/2025-11-17 - FA 2003 Schedule 15 para 21 - sets the partnership share used in that calculation https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/21/2025-11-17 - FA 2003 Schedule 15 para 37 - defines when property has left a partnership https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/37/2025-11-17 - FA 2003 Schedule 15 para 39 - applies connection rules to partnership transfer calculations https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/39/2025-11-17 Guidance page from HMRC on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09390 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 source does not give the partners' exact profit shares, the company's share ownership, property values, debts or transfer documents. - A different ownership split, a new owner, connected persons, borrowing, or other linked steps can change the result. - The effective date is not given, so the law in force on that date must be checked. 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: Stamp duty when a property partnership transfers homes to a company
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