SDLT group relief: when a company sale within 3 years makes SDLT use original land value
Group relief can be taken back
If a company receives land under group relief and then leaves the group within three years, SDLT may become due. A share sale can trigger the issue even when the land is not sold again.
- Check the group structure and the timeline.
- Check who held the land when the company left.
- Use the land’s value on the original transfer date.
Scroll down for the full analysis.
Read the original guidance here:
SDLT group relief: when a company sale within 3 years makes SDLT use original land value
SDLT group relief: when a company sale within 3 years makes SDLT use original land value
A company can lose stamp duty land tax relief after a tax-free transfer within its group if the company receiving the land is sold within three years, and the bill may use the land’s value when it was first transferred rather than its value when the company is sold.
That can still be a large bill.
What this rule is about
Although group relief can remove SDLT when land moves between companies in the same group, it is intended for genuine internal moves rather than a permanent tax-free route before part of the group is sold outside it.
That distinction matters.
Often, the key issue is a share sale rather than a second sale of the land. Once the company holding the land leaves the group, the earlier relief may be taken back.
What the official source says
HMRC’s manual gives an example involving A Ltd and B Ltd. A Ltd owns all of B Ltd, transfers a freehold plot to B Ltd for no payment, and B Ltd claims group relief.
Within three years, A Ltd sells B Ltd’s shares to an unconnected buyer. Because B Ltd still owns the plot when it leaves A Ltd’s group within three years, HMRC says the relief is withdrawn and no exception applies.
That is HMRC’s conclusion.
- The land first moved between companies in the same group.
- The company receiving it later left that group.
- The departure happened within three years of the original transfer.
- That company still held the transferred land when it left.
- On HMRC’s stated facts, no statutory exception prevented withdrawal.
This is HMRC guidance, not the law itself. In the legislation, the withdrawal rule and its exceptions are set out. HMRC’s example shows how it applies the rule to these facts.
What this means in practice
Do not focus only on the price paid for the shares. For the earlier land transfer, the important figure is the land’s market value on its original effective date. In other words, that is the date the transfer counted for SDLT.
Later growth in value does not increase this particular SDLT charge. A later fall in value does not reduce the historic value used for the calculation either.
- Check planned share sales before claiming group relief.
- Keep a valuation from the date land moved within the group.
- Check whether the receiving company still owns the land.
- Use the SDLT rules that applied on the original transfer date.
A point people often miss is that a transfer for no cash can still produce SDLT where relief is later withdrawn, even though no new land sale has taken place.
The tax is not based on a new land sale.
How to analyse it
Begin with the first transfer, then work forward through the ownership changes. A clear timeline usually matters more than the labels used in the deal papers.
- Was the original land transfer between companies in the same group?
- Did the receiving company claim group relief for that transfer?
- What was the effective date of the original transfer?
- Did the receiving company leave the seller’s group within three years?
- Was that departure linked to arrangements made within those three years?
- Did the company, or a linked company leaving with it, still hold the land?
- Does a statutory exception apply to the particular group change?
- What was the land worth on the original transfer date?
What if the land was sold before the company left the group? Here, the holding condition is important. You cannot safely assume the answer from the share sale alone.
Example
Here is HMRC’s illustration. A Ltd owns 100% of B Ltd. A Ltd transfers a freehold plot to B Ltd without payment, and B Ltd claims group relief. The plot is worth £1,750,000 on 7 July 2006.
A Ltd then sells B Ltd’s shares to an outside buyer within three years. B Ltd still owns the plot. HMRC says the earlier group relief is withdrawn. The SDLT is worked out as though the original transfer had been for £1,750,000.
The source does not give the final tax figure. That figure needs the SDLT rates and rules that applied on the original transfer date.
Why this can be difficult in practice
Company groups can change through several steps. A sale may involve a parent company, a holding company, or a wider restructuring. The company signing the share sale may not be the company that transferred the land.
Timing also matters. Even where the departure itself happens later, the law can catch it if plans for that departure were put in place before the three years end.
- A sale of shares can matter even though the land does not move again.
- No cash paid on the first transfer does not settle the SDLT result.
- A later land valuation is not the starting point for this withdrawal charge.
- Corporate charts alone may not show plans or arrangements already in place.
Key takeaways
- Group relief can be withdrawn after the receiving company leaves the group.
- The three-year period starts from the original land transfer date.
- The historic market value of the land is central to the calculation.
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 62 — claims for group relief in land tax returns
- FA 2003 Schedule 7 para 1 — group relief for transfers between group companies
- FA 2003 Schedule 7 para 3 — when group relief is withdrawn after leaving
- FA 2003 Schedule 7 para 4 — specified cases where group relief is not 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
- Whether an exception applies depends on the full corporate history and the reason for the group change.
- The source does not state the final SDLT amount for its historic example, so this page does not calculate one.
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 date of the original transfer
- Company ownership records before and after the share sale
- Documents showing when any sale or restructuring was planned
- Evidence of who held the land when the company left the group
- A valuation of the land on the original transfer 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 When group relief is withdrawn after a company sale [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 62 - claims for group relief in land tax returns https://www.legislation.gov.uk/ukpga/2003/14/section/62/2025-11-17 - FA 2003 Schedule 7 para 1 - group relief for transfers between group companies https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/1/2025-11-17 - FA 2003 Schedule 7 para 3 - when group relief is withdrawn after leaving https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/3/2025-11-17 - FA 2003 Schedule 7 para 4 - specified cases where group relief is not withdrawn https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/4/2025-11-17 HMRC's guidance page on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm23090a 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 - Whether an exception applies depends on the full corporate history and the reason for the group change. - The source does not state the final SDLT amount for its historic example, so this page does not calculate one. 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: SDLT group relief: when a company sale within 3 years makes SDLT use original land value
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