Stamp duty on a series of subsales: HMRC’s example explained
At a glance
HMRC’s example shows that several linked sales before completion may produce SDLT issues for the middle buyers as well as the final buyer.
- B and C are each treated by HMRC as taxable on £1 million before relief.
- D is treated by HMRC as taxable on £1.1 million.
- The example does not identify the relief or its conditions.
Scroll down for the full analysis.
Read the original guidance here:
Stamp duty on a series of subsales: HMRC’s example explained
Stamp duty on a series of subsales
Where land is sold several times before completion, stamp duty can arise at more than one stage. HMRC’s example says the middle buyers are each taxed by reference to £1 million before relief, while the final buyer is taxed by reference to £1.1 million.
What this rule is about
A subsale occurs when a buyer agrees to sell their contract rights before the original sale completes. This may create a chain: the first seller deals with Buyer B, B sells on to C, and C sells on to D.
It may seem that only D matters because D receives the land. HMRC’s example indicates that the position is more complicated.
What the official source says
Where all three contracts complete together, HMRC’s manual says that B and C are each taxable on £1 million under the normal contract rules that apply. They can claim relief. HMRC says D is taxable on £1.1 million.
- A agrees to sell land to B for £1 million.
- B pays A a £100,000 deposit.
- B agrees to sell on to C for £1 million.
- C pays B a £100,000 deposit.
- C agrees to sell on to D for £1.1 million.
- D pays C a £200,000 deposit.
- All contracts complete together.
This reflects HMRC’s view in its manual. A manual is guidance, not the law itself.
What this means in practice
At completion, the money flows back through the chain. D pays C £900,000, C pays B £900,000, and B pays A £900,000. Together with the earlier deposits, those payments settle the agreed prices.
- B has received £1 million from C and paid £1 million to A.
- C has received £1.1 million from D and paid £1 million to B.
- D has paid £1.1 million for the land.
- D alone may not face stamp duty.
How to analyse it
Begin with the paperwork rather than the movement of money. Focus on the parties to each contract and on everything that occurred before the original contract completed.
- List every contract in the order it was signed.
- Record the price and deposit under each contract.
- Check whether any buyer sold on before completion.
- Check whether all contracts completed at the same time.
- Identify the person who finally received the land.
- Find the exact relief said to apply and check its conditions.
- Check the law in force on the relevant transaction date.
Example
Here, A sells for £1 million, B sells on for the same £1 million, and C sells on for £1.1 million. For SDLT, HMRC’s example gives B and C an initial figure of £1 million. It gives D an initial figure of £1.1 million. The example does not give the final tax figures or explain the relief claim.
Why this can be difficult in practice
This is where people often go wrong: a chain of contracts is different from one simple sale. Minor changes in timing or contract terms may alter the analysis.
- A deposit may matter because it forms part of the price.
- Completion dates may not tell the whole story if a contract was performed earlier.
- The relief mentioned by HMRC cannot be assumed without checking its legal conditions.
- A current answer cannot safely be taken from an undated worked example.
Key takeaways
- A series of subsales can create more than one SDLT starting point.
- HMRC’s example puts B and C at £1 million each before relief.
- Check the contracts, dates and exact relief before relying on the example.
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 42 — the charge to stamp duty land tax
- FA 2003 section 43 — what counts as a land transaction
- FA 2003 section 44 — how contracts and completion are treated
- FA 2003 section 45 — subsales before the original contract completes
- FA 2003 section 55 — how tax is worked out from price
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 example gives no transaction date, so it cannot confirm whether the same relief was available for a current or historic purchase.
- The example does not explain the conditions, claim method, or final tax result after relief.
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 signed contracts between every buyer and seller.
- The completion statements and proof of every deposit.
- The dates of exchange, substantial performance, and completion.
- The exact statutory relief relied on and the transaction date.
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 on a series of subsales: HMRC’s example explained [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 42 - the charge to stamp duty land tax https://www.legislation.gov.uk/ukpga/2003/14/section/42/2025-11-17 - FA 2003 section 43 - what counts as a land transaction https://www.legislation.gov.uk/ukpga/2003/14/section/43/2025-11-17 - FA 2003 section 44 - how contracts and completion are treated https://www.legislation.gov.uk/ukpga/2003/14/section/44/2025-11-17 - FA 2003 section 45 - subsales before the original contract completes https://www.legislation.gov.uk/ukpga/2003/14/section/45/2025-11-17 - FA 2003 section 55 - how tax is worked out from price https://www.legislation.gov.uk/ukpga/2003/14/section/55/2025-11-17 HMRC's guidance page on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm21640 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 supplied example gives no transaction date, so it cannot confirm whether the same relief was available for a current or historic purchase. - The example does not explain the conditions, claim method, or final tax result after relief. 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 on a series of subsales: HMRC’s example explained
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