Stamp duty when you resell part of land before completion
Subsale of part of land
HMRC’s example shows that reselling one plot before your own purchase completes does not automatically remove stamp duty from the original deal.
- The middle buyer starts with the original purchase amount.
- Partial subsale relief may remove the amount linked to the plot sold on.
- The final buyer can have a separate stamp duty transaction.
Scroll down for the full analysis.
Read the original guidance here:
Stamp duty when you resell part of land before completion
If you agree to buy two plots, then sell one on before completion, stamp duty can still start from your full purchase price. In HMRC’s example, relief may reduce the amount for the plot you pass on. The final buyer may also have their own stamp duty position.
What this rule is about
This is a subsale. A subsale arises when a buyer, while the original land contract remains unfinished, agrees to a further sale before that first sale completes and title passes. Timing matters.
That can sound like one chain of events. For stamp duty, it may involve more than one land deal. Part resale need not erase the first purchase.
Here, the middle buyer keeps one plot and sells the other. That distinction matters: the relief is only partial.
What the official source says
HMRC gives an example involving two plots. A agrees to sell both plots to B for £1 million. Plot 1 is worth £600,000 and Plot 2 is worth £400,000.
Before completion, B agrees to sell Plot 2 to C for £400,000. Both sales complete at the same time. C pays B £400,000, and B pays A £1 million.
- For the purposes of Schedule 2A, HMRC treats B’s sale of Plot 2 to C as a transfer that stands on its own.
- Entering that transfer does not, by itself, mean C makes a separate land deal.
- C’s actual purchase from B is treated as a purchase for £400,000.
- HMRC says B’s starting position is a purchase from A for £1 million.
- B may claim qualifying subsale relief if all the statutory conditions are met.
- Because B resold only Plot 2, full relief is not available in this example.
- HMRC deducts £400,000 for Plot 2 from B’s £1 million amount.
- B’s amount for stamp duty is therefore reduced to £600,000.
What this means in practice
The middle buyer does not simply pay stamp duty on the plot they keep because they have sold the other plot on. The legal starting point is wider. Relief is then needed to reach the result HMRC describes.
That distinction sounds technical. It can decide a large amount of tax.
- The retaining buyer may need a return. It may show the original deal and claim relief.
- In relation to their own purchase, the buyer of the onward plot may also have a separate position on filing a return.
- The paperwork must show that the onward sale happened before the first contract completed.
- To support the calculation, the figures must make clear exactly which share of the original £1 million belongs to the plot that is sold on.
How to analyse it
Begin with the documents and timing, because the sequence of contracts, later agreements, completion, and substantial performance determines the analysis before any labels chosen by the parties. Labels do not decide it. Calling a deal a “back-to-back sale” does not settle the stamp duty answer.
- What land does the original contract cover?
- Has the original contract completed or been substantially performed before the later sale?
- Does the later agreement cover all the land or only part of it?
- Who will receive the legal title to each plot on completion?
- Is the later deal a free-standing transfer rather than an assignment of rights?
- What does the final buyer pay the middle buyer?
- Is any extra amount paid for the transfer itself?
- What part of the original price fairly relates to the plot being sold on?
- Are all the conditions for qualifying subsale relief met, including those outside the example?
Example
Imagine Ben agrees to buy two plots from Aisha for £1 million. One plot is valued at £600,000 and the other at £400,000. Before Ben completes, he agrees to sell the £400,000 plot to Chloe. Both sales complete together.
Using HMRC’s example, Ben begins with a £1 million purchase from Aisha. Ben may claim partial relief. The full conditions must be met for the £400,000 linked to Chloe’s plot. That leaves £600,000 for Ben. Chloe’s purchase is for the £400,000 she pays Ben.
Why this can be difficult in practice
In HMRC’s example, the figures align neatly with one another; real deals often do not. A plot’s market value, sale price and share of the original price may differ.
This is the part people get wrong: the amount removed is the amount of the original price that relates to the land sold on. It is not automatically whatever the later buyer pays.
- A plan may not clearly split the land covered by each agreement.
- A single price may cover land, rights, works or other promises.
- An extra payment for the transfer can affect the calculation for the final buyer.
- A delay between the two completions may change the analysis.
- Relief is not automatic just because one plot is sold on.
- HMRC’s example is not a substitute for checking every statutory condition.
Key takeaways
- Part sales can create middle-buyer stamp duty.
- In HMRC’s example, partial relief reduces B’s £1 million amount to £600,000.
- A clear identification of the land sold on, together with a proper match to the original price, is essential.
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 44 — completed contracts treated as one land transaction
- FA 2003 section 45 — schedule 2a rules for pre-completion dealings
- FA 2003 section 76 — returns for notifiable land transactions
- FA 2003 Schedule 2A para 1 — when a pre-completion transaction is within schedule
- FA 2003 Schedule 2A para 2 — meaning of a free-standing transfer and transferor
- FA 2003 Schedule 2A para 3 — transferee not treated as entering a separate transaction
- FA 2003 Schedule 2A para 9 — amount included for a free-standing transfer
- FA 2003 Schedule 2A para 16 — conditions for a qualifying subsale; full relief for a qualifying subsale; partial relief where only part is resold; claim for qualifying subsale relief
- FA 2003 Schedule 2A para 18 — additional conditions affecting subsale relief
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 set out every condition in Schedule 2A paragraph 16 or paragraph 18. A real transaction must be tested against the full statutory wording.
- The source does not explain how to value or attribute the original price where the price for the part resold is not clear or does not match its share of the original deal.
- The correct answer can change if the first contract has already been substantially performed, if the legal documents do something different, or if extra sums are paid between the parties.
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 original contract between the first seller and middle buyer.
- The agreement under which the middle buyer sells part of the land.
- Plans showing exactly which land is retained and which part is resold.
- Completion statements showing who paid each amount and when.
- Evidence supporting the amount of the original price attributable to the part resold.
- Any agreement or payment for the transfer of rights itself.
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 you resell part of land before completion [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 44 - completed contracts treated as one land transaction https://www.legislation.gov.uk/ukpga/2003/14/section/44/2025-11-17 - FA 2003 section 45 - schedule 2a rules for pre-completion dealings https://www.legislation.gov.uk/ukpga/2003/14/section/45/2025-11-17 - FA 2003 section 76 - returns for notifiable land transactions https://www.legislation.gov.uk/ukpga/2003/14/section/76/2025-11-17 - FA 2003 Schedule 2A para 1 - when a pre-completion transaction is within schedule https://www.legislation.gov.uk/ukpga/2003/14/schedule/2A/paragraph/1/2025-11-17 - FA 2003 Schedule 2A para 2 - meaning of a free-standing transfer and transferor https://www.legislation.gov.uk/ukpga/2003/14/schedule/2A/paragraph/2/2025-11-17 - FA 2003 Schedule 2A para 3 - transferee not treated as entering a separate transaction https://www.legislation.gov.uk/ukpga/2003/14/schedule/2A/paragraph/3/2025-11-17 - FA 2003 Schedule 2A para 9 - amount included for a free-standing transfer https://www.legislation.gov.uk/ukpga/2003/14/schedule/2A/paragraph/9/2025-11-17 - FA 2003 Schedule 2A para 16 - conditions for a qualifying subsale https://www.legislation.gov.uk/ukpga/2003/14/schedule/2A/paragraph/16/2025-11-17 - FA 2003 Schedule 2A para 16 - full relief for a qualifying subsale https://www.legislation.gov.uk/ukpga/2003/14/schedule/2A/paragraph/16/2025-11-17 - FA 2003 Schedule 2A para 16 - partial relief where only part is resold https://www.legislation.gov.uk/ukpga/2003/14/schedule/2A/paragraph/16/2025-11-17 - FA 2003 Schedule 2A para 16 - claim for qualifying subsale relief https://www.legislation.gov.uk/ukpga/2003/14/schedule/2A/paragraph/16/2025-11-17 - FA 2003 Schedule 2A para 18 - additional conditions affecting subsale relief https://www.legislation.gov.uk/ukpga/2003/14/schedule/2A/paragraph/18/2025-11-17 HMRC's guidance page on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm21620 HOW I WANT YOU TO ANSWER 1. Work from the legislation above. Read it before answering. HMRC guidance is HMRC's 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 set out every condition in Schedule 2A paragraph 16 or paragraph 18. A real transaction must be tested against the full statutory wording. - The source does not explain how to value or attribute the original price where the price for the part resold is not clear or does not match its share of the original deal. - The correct answer can change if the first contract has already been substantially performed, if the legal documents do something different, or if extra sums are paid between the parties. 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 you resell part of land before completion
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