Guide to Disregarded Consideration in Stamp Duty Land Tax Transactions

SDLT section 75C(4): ignoring certain consideration in a notional transaction

Under SDLT section 75C, a notional land transaction may need to be calculated by looking at the overall arrangements. Section 75C(4) says that, when working out the chargeable consideration for that notional transaction, any consideration paid for certain transactions covered by specific reliefs or special rules must be left out. However, those transactions may still count as part of the wider scheme.

• You should not simply add together all amounts paid across every step of the arrangements when section 75C applies.
• Consideration must be disregarded if the transaction falls within one of the listed provisions, including sections 60, 61, 63 to 67, 69, 71, 74 and 75, plus Schedule 6A and Schedule 8.
• This can reduce the chargeable consideration for the notional transaction and may lower the SDLT due.
• The rule is limited: it ignores the consideration for the listed transaction, not necessarily the transaction itself for all section 75C purposes.
• In practice, you must check carefully whether the transaction genuinely falls within the exact statutory provision, rather than merely looking similar.

Scroll down for the full analysis.

SDLT section 75C(4): when consideration is ignored for the notional transaction

This page explains a narrow but important SDLT rule. It deals with how to calculate the chargeable consideration for a notional transaction under section 75C, where certain earlier or related transactions fall within specific reliefs or special rules. The key point is that consideration paid for some listed transactions must be left out of account when working out the consideration for the notional transaction. That can affect whether SDLT is due and how much.

What this rule is about

Section 75C is part of the SDLT rules that can apply to certain arrangements involving more than one transaction. In some cases, the legislation requires a notional land transaction to be identified and taxed by reference to the overall effect of the arrangements, rather than looking only at each step in isolation.

Section 75C(4) then adjusts how the chargeable consideration for that notional transaction is calculated. It says that consideration paid for certain specified transactions is to be disregarded. In other words, even if money or other value was given for one of those transactions, that amount is not counted when calculating the consideration for the notional transaction under section 75C.

This matters because section 75C is aimed at the tax treatment of arrangements as a whole, but Parliament has decided that some transactions should not feed into that calculation where they fall within particular statutory provisions.

What the official source says

The HMRC manual states that, when calculating chargeable consideration for the notional transaction under section 75C, any amounts paid as consideration for a transaction falling within the following provisions must be disregarded:

• section 60 – compulsory purchase facilitating development
• section 61 – compliance with planning obligations
• section 63 – demutualisation of an insurance company
• section 64 – demutualisation of a building society
• section 65 – incorporation of a limited liability partnership
• section 66 – transfers involving public bodies
• section 67 – transfer following reorganisation of parliamentary constituencies
• section 69 – acquisition by bodies established for national purposes
• section 71 – certain acquisitions by a registered social landlord
• section 74 – exercise of collective rights by tenants of flats
• section 75 – crofting community right to buy
• Schedule 6A – relief for certain acquisitions of residential property
• Schedule 8 – charities relief

The manual also makes an important separate point. Even though the consideration for one of those transactions is disregarded in the section 75C(4) calculation, the transaction may still be a scheme transaction. So the transaction is not ignored for every purpose. What is ignored is the consideration paid for it when calculating the chargeable consideration of the notional transaction.

What this means in practice

The practical effect is that you should not automatically total up all amounts paid across all steps in the arrangements when working out the notional transaction under section 75C.

Instead, you need to identify whether any part of the arrangements includes a transaction that falls within one of the listed sections or schedules. If it does, any consideration paid for that transaction is left out of the section 75C(4) calculation.

This can reduce the chargeable consideration for the notional transaction. In some cases it may reduce the tax charge significantly. In others, it may make no difference if the disregarded amount is small or if SDLT would arise anyway on the remaining consideration.

But the rule is limited. It does not say that the transaction disappears from the analysis altogether. The manual expressly warns that such a transaction may still form part of the wider scheme. So there are two separate questions:

• is the transaction part of the arrangements or scheme for section 75C purposes?
• if so, must the consideration paid for that transaction nevertheless be disregarded when calculating the notional transaction?

Those questions should not be conflated.

How to analyse it

A sensible way to approach this point is as follows.

1. Identify whether section 75C is in point at all. This rule only matters if there is a section 75C notional transaction to calculate.

2. List the actual transactions within the arrangements. Work out what land transactions occurred, who the parties were, and what consideration was given for each step.

3. Check whether any transaction falls within one of the provisions listed in section 75C(4), as reflected in the manual. This is a technical question. It is not enough that the transaction looks similar in substance. It needs to fall within the relevant section or schedule.

4. Disregard the consideration paid for any such listed transaction when calculating the chargeable consideration for the notional transaction.

5. Do not assume the transaction is irrelevant for all other purposes. Consider separately whether it still forms part of the overall scheme transaction analysis.

6. Keep the legal basis clear. The disregard comes from the legislation. The manual is explaining how HMRC reads and applies it.

In practice, this means advisers and conveyancers need to distinguish between identifying the transactions in the scheme and measuring the consideration for the notional charge. The same transaction may matter for the first exercise but not for the second.

Example

This is only an illustration of how the rule operates.

Suppose arrangements involve several land transactions, and one step is a transaction that falls within Schedule 8 charities relief. Consideration is paid for that step. If section 75C applies so that a notional transaction has to be calculated, the consideration paid for the Schedule 8 transaction is disregarded when working out the chargeable consideration for the notional transaction.

However, that does not necessarily mean the charities transaction is ignored completely in deciding whether it was part of the wider scheme. The manual says it may still comprise a scheme transaction. So the transaction may still matter to the section 75C analysis, even though its consideration is left out of the final computation.

Why this can be difficult in practice

The main difficulty is that this is a two-layer rule.

First, you have to determine whether a transaction falls within one of the listed statutory provisions. That may itself require careful analysis of the detailed conditions of the particular relief or special rule.

Second, you then have to apply section 75C correctly. The fact that consideration is disregarded does not mean the transaction is ignored for all purposes. Readers can easily slip into one of two mistakes:

• counting the consideration when the legislation says it must be disregarded
• treating the whole transaction as irrelevant, when the manual says it may still be part of the scheme

Another difficulty is that the source material here is brief. It gives the computational rule, but not the full detail of each listed provision. So in a real case, the answer may depend on whether the transaction genuinely falls within section 60, section 61, Schedule 8, or another listed provision, rather than merely resembling it.

Key takeaways

• For a section 75C notional transaction, consideration paid for transactions within certain listed provisions must be disregarded.
• The listed transaction may still be part of the wider scheme, even though its consideration is left out of the calculation.
• The critical practical question is whether the transaction truly falls within one of the specified sections or schedules.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Guide to Disregarded Consideration in Stamp Duty Land Tax Transactions

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