When a UK company can count as non-resident for SDLT
UK companies and the non-resident SDLT surcharge
A company that is UK resident for corporation tax can still count as non-resident for the SDLT surcharge.
- It must be a close company.
- It must meet the non-UK control test.
- It must not be an excluded company.
Scroll down for the full analysis.
Read the original guidance here:
When a UK company can count as non-resident for SDLT
A company can be based in the UK but still count as non-resident for the stamp duty surcharge. That can matter when the company buys a home. The key issue is who controls the company, not simply where it is based.
What this rule is about
According to HMRC, these rules prevent people outside the UK from avoiding the surcharge when they buy through a UK-resident company.
That distinction sounds technical. It may change the tax due on a property purchase.
This page covers only the second company condition. It applies where a company is UK resident for corporation tax, but may nevertheless count as non-resident for this SDLT test.
What the official source says
Paragraph 7(3) of Schedule 9A sets three further conditions. Normally, the effective date is the date the purchase takes effect for SDLT, and all three must be met then.
HMRC’s manual says a UK-resident company counts as non-resident for the surcharge only if it is a close company, meets the non-UK control test, and is not an excluded company.
- The company must be UK resident for corporation tax purposes.
- It must be a close company.
- It must meet the non-UK control test for that purchase.
- It must not be an excluded company.
The law applies the close company rules from corporation tax, with changes for this surcharge. Broadly, HMRC describes a close company as one controlled by five or fewer people with an interest in its capital or income.
HMRC also says that director control can be enough. A company may also be close where more than half its assets would go to five or fewer people, or to directors, if it were wound up.
What this means in practice
You might think a UK company automatically avoids the non-resident surcharge. It does not. Even where a UK company is controlled overseas, it can fall within the surcharge rules when the other conditions are met.
The company’s registered office is not the whole answer. Nor is the nationality of one shareholder by itself.
- Check the company’s corporation tax residence at the relevant date.
- Check whether the company is close under the imported rules.
- Check who has control, including indirect control through other companies.
- Check whether an excluded-company rule applies.
According to HMRC, certain companies count as close despite what would otherwise be an exception. This includes certain companies controlled by non-close companies and certain quoted companies with substantial public voting ownership.
How to analyse it
Start with the company that is buying the property. Then work through the conditions in order. Skipping the close-company question is a common mistake.
- Identify the date on which the SDLT purchase takes effect.
- Establish whether the company was UK resident for corporation tax on that date.
- Map shares, votes, income rights and rights to assets on a winding-up.
- Decide whether the company is close under the rules applied by paragraph 8.
- Apply the separate non-UK control test.
- Check whether the company is excluded from this special test.
What actually decides the result? Often, it is the detail of ownership rights and control arrangements. A simple list of shareholders may not show the full position.
Example
Imagine Priya lives outside the UK and controls a company that is UK resident for corporation tax. The company buys a flat in England. If it is a close company, meets the non-UK control test and is not excluded, paragraph 7(3) can make it count as non-resident for the surcharge.
Change one fact: if the company is an excluded company, this second condition is not met. The outcome then depends on the rest of the non-resident surcharge rules, which this page does not cover.
Why this can be difficult in practice
Under the close-company rules, rights held through another company, along with rights to income and rights on a winding-up, may all matter.
There are also special changes to the normal exceptions. For this SDLT purpose, a company may be treated as close despite appearing not to be close at first glance.
- Do not assume UK tax residence settles the surcharge question.
- Do not treat share percentage as the only form of control.
- Do not overlook rights held by directors or through other companies.
- Do not treat HMRC’s manual as a substitute for the legislation.
The official source does not explain the full non-UK control test on this page. That part needs separate checking against the legislation and the facts.
Key takeaways
- A UK-resident company can still count as non-resident for the SDLT surcharge.
- The close-company, non-UK control and excluded-company tests all matter.
- Ownership and control evidence is central to the 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 Schedule 9A para 7 — company test for the non-resident surcharge
- FA 2003 Schedule 9A para 8 — application of close company rules; modified close company exception rules; quoted companies treated as close companies
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 supplied material does not set out how to apply the non-UK control test to a particular ownership structure.
- The supplied statutory library does not contain the current text of Schedule 9A or the imported corporation tax provisions.
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 company’s tax residence at the effective date of the purchase.
- Its share ownership, voting rights and rights to income or assets.
- Details of directors and any companies controlling it.
- Evidence relevant to the non-UK control test and any excluded-company status.
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 When a UK company can count as non-resident for SDLT [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 Schedule 9A para 7 - company test for the non-resident surcharge https://www.legislation.gov.uk/ukpga/2003/14/schedule/9A/paragraph/7/2025-11-17 - FA 2003 Schedule 9A para 8 - application of close company rules https://www.legislation.gov.uk/ukpga/2003/14/schedule/9A/paragraph/8/2025-11-17 - FA 2003 Schedule 9A para 8 - modified close company exception rules https://www.legislation.gov.uk/ukpga/2003/14/schedule/9A/paragraph/8/2025-11-17 - FA 2003 Schedule 9A para 8 - quoted companies treated as close companies https://www.legislation.gov.uk/ukpga/2003/14/schedule/9A/paragraph/8/2025-11-17 Guidance page from HMRC on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09910 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 supplied material does not set out how to apply the non-UK control test to a particular ownership structure. - The supplied statutory library does not contain the current text of Schedule 9A or the imported corporation tax provisions. 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: When a UK company can count as non-resident for SDLT
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