Stamp duty when land is passed into a partnership
Partnership subsales and stamp duty
HMRC’s example shows that a buyer who passes land to a partnership may not remove their own stamp duty position.
- HMRC treats the partnership as having a separate position.
- A 90% partnership share is not enough to use the special partnership rules.
- The current law and transaction date need checking.
Scroll down for the full analysis.
Read the original guidance here:
Stamp duty when land is passed into a partnership
Buying land and then passing it to a partnership can create two stamp duty positions. That can be surprising, especially where you own most of the partnership. HMRC says a 90% share is insufficient.
What this rule is about
The example starts with a chain of two deals. A agrees to sell land to B. Before that finishes, B agrees to sell the same land to a partnership called C.
Both deals finish together and are connected. The land is worth £1 million, and each agreement is for £1 million.
The key point is simple: the middle person does not disappear just because the final buyer is a partnership in which they have a large share.
What the official source says
According to HMRC’s manual, when B buys from A under connected agreements that finish together, B has a stamp duty position and can claim relief in this particular example. That relief is available here.
- A agrees to sell the land to B for £1 million.
- B agrees to sell the land to C for £1 million.
- B has a 90% share in partnership C.
- The two agreements finish at the same time.
- The agreements are connected with each other.
- HMRC says C also has a separate stamp duty position.
- For C, HMRC gives the amount paid for the land as £1 million.
HMRC says C is treated as buying from A, the original seller. Because HMRC treats C as buying from A rather than as receiving land contributed by B to C, the special rules for a person putting land into their own partnership do not apply. They do not apply here.
What this means in practice
In practice, it is easy to focus only on the person who ends up with the land, even though each agreement and the route taken by the land also need review. That is not enough. You must also look at each agreement and the route the land takes.
- B’s purchase needs its own stamp duty review.
- C’s purchase needs a separate review.
- B’s 90% partnership share does not settle the answer.
- The £1 million price matters for C’s position in HMRC’s example.
- A relief claimed by B does not remove C’s separate position.
How to analyse it
Start with the paperwork, not the intended result. Ask who agreed to buy, who agreed to sell, and who finally received the land.
- List each agreement in the order it was made.
- Identify the buyer and seller for each step.
- Check whether the first agreement finished before the later deal.
- Check whether both steps finished together and were connected.
- Record every payment and confirm the market value.
- Check the partnership agreement and each partner’s share.
- Identify any relief claimed by the first buyer.
- Check the law that applied on the effective date.
Example
Sam agrees to buy land from Alex for £1 million. Sam then agrees, before either transaction finishes and as part of the same arrangement, to pass it for £1 million to a partnership in which Sam has a 90% share. The two deals finish together as one arrangement.
Under HMRC’s example, Sam has a stamp duty position on the first deal and can claim the relief mentioned there. The partnership also has a stamp duty position. HMRC treats its purchase as being from Alex and uses £1 million as the amount paid. This example does not calculate the tax due.
Why this can be difficult in practice
This is an old manual example about a technical structure. The law on subsales has changed, and the page does not give the date of the example. It is useful for showing HMRC’s reasoning, but it is not a shortcut for a current deal.
- People often assume a large partnership share means no separate tax question.
- That assumption does not match HMRC’s example.
- The timing of completion can change the analysis.
- Small differences in the contracts can matter.
- The available relief and its conditions need separate checking.
Key takeaways
- A linked sale to a partnership can create two stamp duty positions.
- Owning 90% of the partnership does not decide the result.
- Check the agreements, timing and law in force for the deal.
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 — charges stamp duty land tax on land transactions
- FA 2003 section 43 — defines a land transaction and its parties
- FA 2003 section 45 — sets rules for subsales before contract completion
- FA 2003 Schedule 4 para 1 — defines the amount paid for a land transaction
- FA 2003 Schedule 15 para 10 — sets when special partnership transfer rules apply
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 manual does not identify the date of the example, so it cannot by itself show which historic version of the law applies.
- A current transaction needs checking under the law in force on its effective date, including the current subsale rules.
- The source does not explain the relief available to B or whether any conditions for that relief remain met in another case.
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 agreement between A and B
- The signed agreement between B and C
- Completion statements and transfer documents
- Evidence of whether both steps completed together and were connected
- The partnership agreement and each partner’s share
- The effective date of each transaction
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 land is passed into a partnership [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 - charges stamp duty land tax on land transactions https://www.legislation.gov.uk/ukpga/2003/14/section/42/2025-11-17 - FA 2003 section 43 - defines a land transaction and its parties https://www.legislation.gov.uk/ukpga/2003/14/section/43/2025-11-17 - FA 2003 section 45 - sets rules for subsales before contract completion https://www.legislation.gov.uk/ukpga/2003/14/section/45/2025-11-17 - FA 2003 Schedule 4 para 1 - defines the amount paid for a land transaction https://www.legislation.gov.uk/ukpga/2003/14/schedule/4/paragraph/1/2025-11-17 - FA 2003 Schedule 15 para 10 - sets when special partnership transfer rules apply https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/10/2025-11-17 HMRC's guidance page on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm21680 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 manual does not identify the date of the example, so it cannot by itself show which historic version of the law applies. - A current transaction needs checking under the law in force on its effective date, including the current subsale rules. - The source does not explain the relief available to B or whether any conditions for that relief remain met in another case. 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 land is passed into a partnership
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