Group relief withdrawn: how stamp duty is worked out
Group relief withdrawal
When a company leaves a group after an internal land transfer, group relief may be withdrawn. The SDLT calculation can be limited to the property rights still held at that time.
- Start with the original transfer
- Check what remains when the group changes
- Use market-value evidence from the original date
Scroll down for the full analysis.
Read the original guidance here:
Group relief withdrawn: how stamp duty is worked out
If a company group claims relief from stamp duty land tax, SDLT, the saving may later be lost. The key question is not always the whole original property. It can be the part still held when the group link ends.
What this rule is about
Group relief can remove SDLT from a land transfer between companies in the same group. It helps when a group moves property internally.
But relief is not always final. If the buyer later leaves the seller’s group, the law can take it back. This is called withdrawal of group relief.
Later company sales need not trigger full SDLT.
What the official source says
Where group relief is withdrawn because the buyer leaves the seller’s group within three years, or under arrangements made within that period, HMRC’s manual starts with the land rights received on the original transfer and asks what the buyer and certain linked companies still hold when the event occurs. Those rights set the scope.
Under the legislation, the tax is the amount that would have been due without group relief. For this calculation, the original transfer is treated as taking place for the property’s market value. Rent is also included where the original deal granted a lease at a rent.
- The buyer must have received group relief on the original transfer.
- The buyer must leave the seller’s group within three years, or under arrangements made within that period.
- At that point, the buyer or a relevant linked company must still hold the transferred land rights, or rights derived from them.
- If all the relevant rights remain, the calculation can cover the full original transfer.
- If only some remain, the law allows an appropriate part of the relief to be withdrawn.
- HMRC says it works out that part by comparing market values at the original effective date.
What this means in practice
Group relief may carry future costs. A planned company sale can create an SDLT bill if the property remains within the part of the group that is sold.
Equally, the bill need not match the whole original transfer. If part of the property has gone before the group change, the amount may be reduced.
- Keep the original SDLT return and relief claim.
- Keep plans and title details showing what was transferred.
- Check what land rights remain when the group structure changes.
- Identify companies that leave the group with the buyer.
- Get market-value evidence for the original transfer date.
- Check whether the original deal included a lease and rent.
How to analyse it
Start with the original internal transfer. Then trace the property and companies forward. This avoids a common mistake: starting with the company sale and overlooking what was transferred.
- Was group relief claimed for the original land transfer?
- What was the effective date of that transfer?
- Has the buyer left the seller’s group within three years?
- Were arrangements for that change already in place within those three years?
- What land rights did the buyer receive at the start?
- What related land rights remain at the relevant time?
- Are any of those rights held by a company that left with the buyer?
- What was the market value of the original subject matter on its effective date?
- Does an exception to withdrawal apply?
Example
Illustration only. Parent Ltd transfers a site worth £1,000,000. Subsidiary Ltd receives it. It claims group relief. Later, Subsidiary Ltd sells part of the site. When it leaves the group, it and a linked company still hold land rights worth £400,000 of the original site value.
HMRC’s manual approach would compare £400,000 with £1,000,000. It would treat 40% as the relevant part of the original deal. It would then work out the SDLT that would have been due on that part, using the market value at the original transfer date. No SDLT rate is shown here because rates depend on the date and facts.
Why this can be difficult in practice
This is where people go wrong: the answer depends on what remains, not simply on the cash received when the company is sold. Land can also change shape through leases, sales, grants of rights or later internal transfers.
The statute says the withdrawal may be an appropriate proportion. It does not set one fixed formula for every case. HMRC’s market-value comparison explains its view, but HMRC guidance is not law.
- A sale of part of a site may not answer what rights remain.
- A lease can require separate attention because rent may affect the calculation.
- Property held by a linked company may still count.
- Market value is tested at the original effective date, not simply at the later group change.
- The group-change rules and statutory exceptions need checking before any calculation starts.
Key takeaways
- Withdrawn group relief can create a later SDLT bill.
- The original market value is central to the calculation.
- Where only part remains, only part of the relief may be withdrawn.
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 Schedule 7 para 1 — group relief for companies in the same group
- FA 2003 Schedule 7 para 3 — events that can withdraw group relief; tax due when group relief is withdrawn; appropriate proportion of relief to be withdrawn
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 legislation does not give a fixed mathematical formula for every partial-withdrawal case. The right proportion can depend on the land rights transferred and those still held when the group changes.
- This article does not decide whether a particular group change triggers withdrawal. That depends on the full statutory conditions and any exception.
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 transfer documents and its effective date
- A record of the companies in the group before and after the change
- Details of all land rights transferred under the original deal
- Details of land rights still held by the buyer and linked group companies
- Market-value evidence at the original effective date
- Lease terms and rent details where the original transfer granted a lease
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 Group relief withdrawn: how stamp duty is worked out [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 Schedule 7 para 1 - group relief for companies in the same group https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/1/2025-11-17 - FA 2003 Schedule 7 para 3 - events that can withdraw group relief https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/3/2025-11-17 - FA 2003 Schedule 7 para 3 - tax due when group relief is withdrawn https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/3/2025-11-17 - FA 2003 Schedule 7 para 3 - appropriate proportion of relief to be withdrawn https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/3/2025-11-17 HMRC's guidance page on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm23085 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 legislation does not give a fixed mathematical formula for every partial-withdrawal case. The right proportion can depend on the land rights transferred and those still held when the group changes. - This article does not decide whether a particular group change triggers withdrawal. That depends on the full statutory conditions and any exception. 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: Group relief withdrawn: how stamp duty is worked out
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