When a UK Company Can Pay the Non-Resident SDLT Increase
UK companies and the non-resident SDLT test
HMRC says a UK-resident company may still face the non-resident SDLT increase if relevant non-resident participators control it.
- Check whether the company is close and not excluded.
- Trace ownership through corporate shareholders where needed.
- Do not treat spouse, sibling and quoted-company rules as simple share-counting exercises.
Scroll down for the full analysis.
Read the original guidance here:
When a UK company can pay the non-resident SDLT increase
A UK company can still face the non-resident stamp duty increase when it buys a home in England or Northern Ireland. Corporation tax residence does not always settle the issue.
Control may decide it.
What this rule is about
The extra SDLT rates for non-resident transactions can apply when a company buys residential property. Finance Act 2003 adds 2% to the relevant SDLT rates where a transaction is non-resident.
A company can reach that result in more than one way. This page covers the second route.
It matters when the buying company is UK resident for corporation tax but people or companies outside the UK control it. That can sound odd.
It can be expensive.
HMRC’s manual follows chains of companies, family links and shareholdings, so the key question is not simply where the buyer is registered but who controls it when it buys the property. Control is the focus.
What the official source says
HMRC says the second condition can make a UK-resident company non-resident for SDLT if it is a close company, is not an excluded company, and meets the non-UK control test. All three points matter.
A close company is broadly one controlled by a small number of people. The detailed statutory rules matter.
A quoted company can also count as close for this SDLT test in circumstances set out in the legislation. Do not overlook that.
- First, check whether the buying company is UK resident for corporation tax.
- Then check whether it is an excluded company.
- Work out whether it is a close company under Schedule 9A.
- Identify every person or company that may be a relevant participator.
- Test whether those relevant participators control the buying company.
- Where an owner is another UK company, trace control through that company.
- For an individual, apply the residence test for the relevant transaction.
HMRC’s examples use the 12 months ending on the purchase date. In those examples, someone with 185 or 187 days in the UK is UK resident, while someone with 38, 77, 87, 93 or 105 days is non-resident.
Those figures are specific. They do not provide a general shortcut for every tax question.
They are the day-count outcomes in HMRC’s examples under the Schedule 9A residence test. Context matters.
What this means in practice
A company does not avoid the non-resident SDLT increase merely because it pays UK corporation tax. You may need to look behind it.
Sometimes you must look behind its corporate shareholders too.
A simple-looking purchase can therefore become much less simple, especially where a 40% holding joins another holding or where someone without a paper majority has control rights. Check the whole position.
- Keep a group chart, not just the buying company’s share register.
- Check voting rights as well as ordinary share percentages.
- Record who owned and controlled each company on the purchase date.
- Check the UK day counts for people whose residence matters.
- Do not assume a UK parent company ends the enquiry.
- Do not assume a listed company falls outside this SDLT test.
If your conveyancer has said the extra rate applies, ask which condition they use. The company’s own tax residence may be the answer.
Or this separate control test may be.
How to analyse it
Start with the buying company, then follow the ownership trail upwards; do not jump from an overseas shareholder straight to a final answer, because that shareholder must be a relevant participator and part of the controlling group. Work through each link.
- Identify the company that is buying the property.
- Check its corporation tax residence and excluded-company status.
- Decide whether it is a close company for this purpose.
- List its direct owners, voting rights and control rights.
- For each corporate owner, ask whether it is a relevant participator.
- If needed, repeat the same exercise for that owner’s owners.
- For each relevant individual, check UK days in the statutory period.
- Apply the association rules with care.
- Finally, ask whether relevant participators together control the buyer.
Why does the last step matter so much? Non-resident owners can exist in the structure without controlling it.
HMRC’s first example shows exactly that result.
Example
Example one: Esther and Dahlia each own 50% of Black Starling Ltd. The company buys a freehold home in England for £465,000 on 1 February 2025.
Esther spent 185 days in the UK during the stated 12-month period. Dahlia spent 38 days there.
HMRC treats Esther as UK resident and Dahlia as non-resident for that transaction; Dahlia is therefore a relevant participator, but her 50% holding does not let her control Black Starling Ltd by herself. The surcharge does not apply.
On HMRC’s analysis, the company does not meet the non-UK control test. That is the result.
Example two: Mystic Orleans Ltd buys a Northern Ireland home for £900,000 on the same date. Black Starling Ltd owns 40%, Atlantic Pack Ltd owns 40%, and Volterra Forks Ltd owns 20%.
Atlantic Pack is controlled by Mohammed and Jackson, who spent 93 and 105 days in the UK. Volterra is controlled by Aadhya.
Krishna’s rights are attributed to Aadhya, her sibling, and Aadhya spent 105 days in the UK; HMRC treats Atlantic Pack and Volterra as relevant participators. Together they hold 60%.
So they control Mystic Orleans.
HMRC says the second condition is met. The outcome changes.
Example three: Amoury Sucre Ltd buys a home in England for £700,000. Tawanda PLC owns 50%, Black Starling owns 25%, and Sipsey Ltd owns 25%.
Imogen owns 60% of Tawanda and spent 77 days in the UK. HMRC says Tawanda is a relevant participator, even though it is quoted.
Its 50% holding does not control Amoury alone, and Sipsey does not help because Buddy’s 87 UK days do not make Sipsey a relevant participator: his spouse Ruth’s rights cannot be attributed to him for this test. HMRC reaches a different result.
The surcharge does not apply.
Why this can be difficult in practice
Share percentages are only the start. Family links, voting rights, indirect control or a special rule for quoted companies can change the outcome.
One point is easy to miss.
The usual close-company association rules do not always apply unchanged here, because Schedule 9A specifically stops a spouse’s or civil partner’s rights being attributed for the non-UK control test. That exception matters.
- Being married can matter when deciding whether people are associates.
- But marriage does not automatically add one spouse’s shares to the other’s for this test.
- Siblings can be associates, as HMRC’s Volterra example shows.
- A public listing does not automatically prevent a company being close for this purpose.
- An overseas company can itself be a relevant participator.
- Indirect ownership can mean several levels of checking.
- A result from one purchase date may not carry over to another date.
HMRC also gives an example of Gemini Kai Ltd, controlled 60% by a German company that is not UK resident for the first company condition. HMRC treats that German company as a relevant participator.
Gemini Kai therefore meets the control test.
The practical lesson is simple: analyse the company structure as at the relevant date, because a group chart prepared months later may not show who controlled the buyer on completion day. Date the analysis.
Key takeaways
- A UK company can count as non-resident for SDLT because of who controls it.
- Non-resident ownership alone is not enough; the relevant owners must control the buyer.
- Check indirect companies, day counts, voting rights and association rules.
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 75ZA — adds non-resident SDLT rates to specified rate tables
- FA 2003 Schedule 9A para 5 — tests an individual’s residence for a property transaction
- FA 2003 Schedule 9A para 7 — first company condition based on corporation tax residence; second company condition based on non-UK control
- FA 2003 Schedule 9A para 8 — defines close companies for the non-resident test
- FA 2003 Schedule 9A para 9 — defines relevant participators in company ownership chains
- FA 2003 Schedule 9A para 10 — limits spouse rights attribution for the control test
- FA 2003 Schedule 9A para 11 — excludes certain companies from the second condition
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 statutory library does not contain the full text of Schedule 9A paragraphs 5 to 11. The explanations of those paragraphs on this page are therefore based on the supplied HMRC manual and its stated statutory references.
- Whether someone controls a company can depend on rights and arrangements beyond the percentages shown in a simple share register.
- The current wording and effect of Schedule 9A after 17 November 2025 needs checking against official legislation before publication or reliance.
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 completion date for the property purchase.
- The company’s corporation tax residence and whether it is an excluded company.
- A full ownership chart, including indirect holdings and voting rights.
- Details of people who can control each company in the chain.
- UK day counts for the relevant 12-month period.
- Family and marriage or civil partnership relationships that may affect control.
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 Pay the Non-Resident SDLT Increase [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 75ZA - adds non-resident SDLT rates to specified rate tables https://www.legislation.gov.uk/ukpga/2003/14/section/75ZA/2025-11-17 - FA 2003 Schedule 9A para 5 - tests an individual's residence for a property transaction https://www.legislation.gov.uk/ukpga/2003/14/schedule/9A/paragraph/5/2025-11-17 - FA 2003 Schedule 9A para 7 - first company condition based on corporation tax residence https://www.legislation.gov.uk/ukpga/2003/14/schedule/9A/paragraph/7/2025-11-17 - FA 2003 Schedule 9A para 7 - second company condition based on non-UK control https://www.legislation.gov.uk/ukpga/2003/14/schedule/9A/paragraph/7/2025-11-17 - FA 2003 Schedule 9A para 8 - defines close companies for the non-resident test https://www.legislation.gov.uk/ukpga/2003/14/schedule/9A/paragraph/8/2025-11-17 - FA 2003 Schedule 9A para 9 - defines relevant participators in company ownership chains https://www.legislation.gov.uk/ukpga/2003/14/schedule/9A/paragraph/9/2025-11-17 - FA 2003 Schedule 9A para 10 - limits spouse rights attribution for the control test https://www.legislation.gov.uk/ukpga/2003/14/schedule/9A/paragraph/10/2025-11-17 - FA 2003 Schedule 9A para 11 - excludes certain companies from the second condition https://www.legislation.gov.uk/ukpga/2003/14/schedule/9A/paragraph/11/2025-11-17 Guidance page from HMRC on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09935 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 statutory library does not contain the full text of Schedule 9A paragraphs 5 to 11. The explanations of those paragraphs on this page are therefore based on the supplied HMRC manual and its stated statutory references. - Whether someone controls a company can depend on rights and arrangements beyond the percentages shown in a simple share register. - The current wording and effect of Schedule 9A after 17 November 2025 needs checking against official legislation before publication or reliance. 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 Pay the Non-Resident SDLT Increase
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