When a limited partnership’s general partner does not trigger the SDLT surcharge
In short
For a company owned through a limited partnership, a non-resident general partner may be ignored in the non-UK control test.
- Check whether the general partner can receive more than 1% of company assets available for distribution.
- Management powers alone do not settle the point.
- HMRC’s manual is guidance; Schedule 9A is the law.
Scroll down for the full analysis.
Read the original guidance here:
When a limited partnership’s general partner does not trigger the SDLT surcharge
When a limited partnership’s general partner does not trigger the SDLT surcharge
A company may be owned by a limited partnership without automatically facing the non-resident stamp duty surcharge. One point can decide the outcome: whether the general partner can receive more than 1% of the company’s assets if they are shared out.
What this rule is about
This rule applies when a company buys a home and ownership runs through a partnership. The issue is not simply where the company is based. It may also turn on who controls it.
For this test, HMRC considers the partnership members rather than the partnership itself. Each partner’s residence position can therefore matter.
A special rule applies to a general partner. It can prevent a non-UK resident general partner from affecting the result.
What the official source says
The law contains a non-UK control test for certain companies. HMRC’s manual says that a general partner is not a relevant participator where they have rights to 1% or less of company assets available for members.
When deciding what a person could receive on a winding up or in other circumstances, the test considers their rights to company assets rather than only the profit share shown beside their name. Asset rights, not profit shares, decide.
- Start by checking whether the company meets the conditions for this company test.
- Apply the individual residence test to each relevant partner.
- Check whether the partnership members have rights that give them control of the company.
- For a general partner, check rights to company assets available for distribution.
- At 1% or less, exclude them here.
HMRC’s manual is not the law itself. It sets out HMRC’s view of how the legislation works, while Schedule 9A remains the legal source.
What this means in practice
Where a non-resident general partner manages the partnership or holds broad management powers, that alone does not mean the company fails the control test, even though the result can seem surprising. A non-resident general partner may not count.
The 1% figure matters because it separates management from a meaningful right to the company’s assets. A small interest may lead to a different result.
- Do not decide the issue from a partner’s job title alone.
- Do not assume every general partner counts in the control test.
- Read the partnership agreement, not just the ownership chart.
- Check rights on a winding up as well as ordinary profit rights.
- Record each partner’s residence position for the relevant period.
How to analyse it
Work through the points in order. Before considering a partner’s UK day count, establish whether that partner is a relevant participator, because otherwise the residence analysis may waste time. Check relevance before counting UK days.
- Identify the company buying the property and its ownership chain.
- Check whether it is UK resident for corporation tax.
- Check whether it is a close company and whether an exclusion applies.
- Identify all partnership members with possible control rights.
- For each general partner, find their rights to company assets on a winding up or another distribution.
- Apply the 1% rule before using that person’s residence result in the non-UK control test.
- Then decide whether relevant participators outside the UK control the company.
What is the common mistake? It is treating the general partner as relevant simply because they run the partnership. HMRC’s example shows why that is insufficient.
Example
HMRC gives an example involving Hollow LP, which owns all the shares in Inadu Ltd. Dominic is the general partner and has 0.5%. Eva and Hope are limited partners with 49.25% each. Inadu Ltd buys a freehold home in Northern Ireland for £850,000 on 1 February 2025.
Dominic spent 150 days in the UK during the stated period, so HMRC treats him as non-resident. Eva and Hope spent 275 and 360 days in the UK, so HMRC treats them as UK resident.
Dominic manages Inadu Ltd. However, his 0.5% holding and voting rights do not give him more than 1% of the company assets available for distribution. HMRC therefore disregards his non-resident status for this control test. Given those facts, HMRC says Inadu Ltd does not meet the non-UK control test. The surcharge does not apply.
Why this can be difficult in practice
Where separate agreements, options, side letters, or winding-up rights affect what a partner can receive, the percentage beside that partner’s name may not reveal the full position. Percentages can conceal material rights.
Residence is tested person by person. The source provides day counts for its example, but it does not set out the whole residence test on this page.
- A 0.5% profit share may not settle rights to assets on a winding up.
- Voting rights, management rights and asset rights may not match.
- An LLP does not remove the need to examine its individual members.
- A company’s UK tax residence does not end the wider control analysis.
- HMRC’s example cannot replace checking the actual agreements and facts.
Key takeaways
- A general partner is not automatically counted in the non-UK control test.
- The key asset-rights limit is more than 1%.
- Check the partnership documents before relying on residence day counts.
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 5 — residence test for an individual buyer; company condition for non-resident transaction status
- FA 2003 Schedule 9A para 8 — when a company is a close company
- FA 2003 Schedule 9A para 9 — non-uk control test for relevant participators; general partner asset-share rule for control
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 explain the full residence test or every route by which a person may control a company.
- Partnership agreements can give rights that are not obvious from the stated profit-sharing percentages alone.
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 any amendments
- Details of voting, management and company control rights
- Rights to company assets on a winding up or other distribution
- Each relevant partner’s UK day count for the tested period
- Evidence that the company is UK resident, close, and not excluded
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 limited partnership’s general partner does not trigger the SDLT surcharge [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 5 - residence test for an individual buyer https://www.legislation.gov.uk/ukpga/2003/14/schedule/9A/paragraph/5/2025-11-17 - FA 2003 Schedule 9A para 5 - company condition for non-resident transaction status https://www.legislation.gov.uk/ukpga/2003/14/schedule/9A/paragraph/5/2025-11-17 - FA 2003 Schedule 9A para 8 - when a company is a close company https://www.legislation.gov.uk/ukpga/2003/14/schedule/9A/paragraph/8/2025-11-17 - FA 2003 Schedule 9A para 9 - non-uk control test for relevant participators https://www.legislation.gov.uk/ukpga/2003/14/schedule/9A/paragraph/9/2025-11-17 - FA 2003 Schedule 9A para 9 - general partner asset-share rule for control https://www.legislation.gov.uk/ukpga/2003/14/schedule/9A/paragraph/9/2025-11-17 Guidance page from HMRC on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09920 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 explain the full residence test or every route by which a person may control a company. - Partnership agreements can give rights that are not obvious from the stated profit-sharing percentages alone. 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 limited partnership’s general partner does not trigger the SDLT surcharge
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