Guide on HMRC Enquiries into Group Relief Claims for Land Transactions

HMRC enquiries into SDLT group relief claims

Claiming SDLT group relief does not stop HMRC from later checking the return. HMRC can open an enquiry within 9 months of the filing date, review the whole SDLT return, ask for supporting documents, and remove the relief if the legal conditions were not met at the effective date of the transaction. The issue of an SDLT5 certificate allows registration to proceed, but it is not HMRC approval of the claim.

• HMRC may enquire into a return with a group relief claim under Schedule 10 to Finance Act 2003, provided it does so within 9 months of filing.
• The enquiry is not limited to the relief claim and can cover all parts of the land transaction return.
• HMRC may ask for the transfer document, related paperwork, and evidence that the companies were in the same group at the effective date.
• Group relief can apply to certain land transfers and lease grants between companies in the same group, but the statutory tests must be satisfied.
• If the evidence does not support the claim, HMRC may amend the return and withdraw the relief, leaving SDLT payable.
• The SDLT5 certificate is part of the filing process and does not mean HMRC has accepted the return or the relief claim.

Scroll down for the full analysis.

HMRC enquiries into SDLT group relief claims

This page explains what happens if HMRC opens an enquiry into a land transaction return that includes a claim for SDLT group relief. The key point is that claiming group relief does not stop HMRC from checking the return later. HMRC can look at the whole return, ask for evidence, and remove the relief if the facts do not support it.

What this rule is about

Group relief is a relief from Stamp Duty Land Tax for certain transfers of land between companies in the same group. The source material deals with HMRC enquiries where that relief has been claimed.

The practical issue is straightforward. A company may file an SDLT return on the basis that group relief applies, but HMRC is entitled to check whether the legal conditions were actually met. If HMRC opens an enquiry, it is not confined to the wording of the relief claim. It may examine the transaction more widely.

The source also highlights an important timing point. HMRC’s decision to enquire is made after the SDLT5 certificate is issued, so title registration is not held up by the enquiry decision. But that certificate does not mean HMRC has approved the relief claim.

What the official source says

According to HMRC’s manual, if HMRC decides to enquire into a land transaction return where group relief has been claimed, it will open the enquiry under paragraph 12 of Schedule 10 to Finance Act 2003. The enquiry must be opened within 9 months of the filing date.

HMRC says the enquiry may cover all aspects of the land transaction return. It does not have to be limited to the group relief claim.

HMRC may ask for documents and further information. The source specifically mentions the transfer document, related documents, and evidence that the conditions in paragraphs 1 and 2 of Schedule 7 to Finance Act 2003 were met.

If the evidence does not support the claim, HMRC says it will amend the self-assessment return to remove the relief.

The source also states that paragraph 1 of Schedule 7 provides exemption where, at the effective date of the transaction, the companies are members of the same group. It adds that the exemption extends to the grant of leases between group companies.

What this means in practice

A group relief claim is not finally settled just because the return has been filed and the SDLT5 certificate has been issued. HMRC may still open an enquiry within the statutory time limit.

For taxpayers and conveyancers, this means two things.

First, the return and the relief claim should be supported by evidence from the outset. It is not enough to assume that the companies are in the same group in a general commercial sense. The statutory tests must be met at the effective date of the transaction, and HMRC may ask for proof.

Second, if HMRC opens an enquiry, the scope may be wider than expected. Even if the immediate trigger is a group relief claim, HMRC may review other parts of the SDLT return as well.

The source material does not set out the detailed conditions in paragraphs 1 and 2 of Schedule 7, but it makes clear that HMRC will want evidence that those tests were satisfied. In practice, that usually means being able to demonstrate the group relationship required by the legislation at the relevant date and showing that the transaction falls within the relief being claimed.

The point about the SDLT5 certificate is especially important. Registration can proceed, but that should not be treated as HMRC clearance. The certificate is part of the SDLT administrative process, not a substantive confirmation that the relief is valid.

How to analyse it

If a transaction relies on SDLT group relief, a sensible way to analyse the position is:

• Identify the effective date of the transaction, because the group condition must be met at that date.
• Check whether the transferor and transferee were members of the same group within the meaning required by Schedule 7.
• Confirm exactly what transaction is being relieved, for example a transfer of land or the grant of a lease between group companies.
• Review the land transaction return as a whole, not just the relief claim, because an HMRC enquiry can extend to all aspects of the return.
• Gather the core documents in case HMRC asks for them, including the transfer instrument, any related documents, and material showing the group relationship.
• Do not assume that issue of the SDLT5 certificate means the claim has been accepted.
• Check whether HMRC opened any enquiry within 9 months of the filing date, because the source identifies that as the time limit for opening the enquiry under Schedule 10.

Example

A parent company transfers a property to its wholly owned subsidiary and claims SDLT group relief on the return. The SDLT5 certificate is issued, and the title is registered. A few months later, HMRC opens an enquiry within the 9-month window.

HMRC asks for the transfer document, related paperwork, and evidence that the companies were members of the same group at the effective date. If the documents show that the statutory group test was met, the claim may stand. If the evidence does not support that position, HMRC may amend the return and withdraw the relief, which would leave SDLT payable on the transaction.

Why this can be difficult in practice

The source material is brief, but it points to some practical difficulties.

The first is timing. The relevant test is applied at the effective date of the transaction. Group structures can change, and a business may assume that companies are “in the same group” without checking the statutory position at the exact legal date that matters.

The second is evidential. HMRC may ask not only for the transfer instrument but also for related documents and additional information about the claim. If the file does not clearly show how the statutory conditions were met, the claim may be vulnerable.

The third is procedural misunderstanding. Some readers may think that because the SDLT5 certificate has been issued and registration has completed, HMRC has effectively accepted the return. The source expressly says that is not the case.

The fourth is scope. An enquiry into a return containing a group relief claim may go beyond the relief itself. That matters where there are other valuation, consideration, or transaction-structure issues elsewhere in the return.

Key takeaways

• HMRC can enquire into an SDLT return containing a group relief claim within 9 months of the filing date.
• The enquiry can cover the whole return, not just the group relief point.
• The SDLT5 certificate allows registration to proceed, but it does not mean HMRC has accepted the group relief claim.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Guide on HMRC Enquiries into Group Relief Claims for Land Transactions

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