Stamp duty group relief when the selling company leaves
In short
HMRC says group relief is not withdrawn where the company that transferred the land leaves the group, causing the receiving company to cease being in the same group.
- Follow the direction of the share sale.
- Do not rely on property values alone.
- Check historic law for older transfers.
Scroll down for the full analysis.
Read the original guidance here:
Stamp duty group relief when the selling company leaves
When one company in your group transfers land to another, a later sale of the first company does not necessarily undo the stamp duty relief.
The decisive issue is which company departs from the group. Group relief may remain available if the company that transferred the land leaves, rather than the company that received it.
What this rule is about
Group relief can remove SDLT on a land transfer between companies within the same corporate group. It is intended for internal property movements, rather than ordinary sales.
If the companies cease to be members of the same group soon after the transfer, there will usually be a risk that the relief is withdrawn and the tax becomes due again. Tax can return.
However, the law provides a specific exception when the selling company leaves the group. That exception matters.
What the official source says
HMRC’s manual includes an example with three companies. A Ltd owns all the shares in both B Ltd and C Ltd.
For no payment, B Ltd transfers freehold land to C Ltd, which claims group relief while both companies remain wholly owned by A Ltd. The transfer is internal.
- The land is worth £1,000,000 when B Ltd transfers it to C Ltd.
- A Ltd later sells all shares in B Ltd to an unconnected buyer.
- B Ltd therefore leaves the group on 7 July 2006.
- The land is then worth £1,750,000.
- HMRC says group relief is not withdrawn in that example.
Why? B Ltd’s departure is the sole reason C Ltd is no longer in the same group as B Ltd.
C Ltd remains within the group that still contains A Ltd.
The distinction may appear minor. It can determine a substantial SDLT bill.
What this means in practice
A sale of the company that originally transferred the land is not automatically equivalent to a sale of the company that received it. The direction of the later share sale is important.
- Check which company transferred the land.
- Check which company received the land.
- Follow the ownership before and after the share sale.
- Do not assume a rise in the land’s value changes this answer.
Under the current wording of the legislation, relief is not withdrawn where the buyer leaves the group because the selling company has left, rather than because the buyer itself has departed. This reflects the result.
How to analyse it
Begin with the company chart instead of the property value. What changed in fact?
- Were both companies in the same group on the transfer date?
- Did the transfer qualify for group relief at that time?
- Did the buyer later leave that group?
- Was that only because the selling company, or its parent, left?
- Did control of the buyer change after the selling company left?
The final question is important. Further legislative rules may apply where control of the buyer changes at a later stage.
Example
Imagine that North Ltd owns all the shares in Field Ltd and River Ltd. Field Ltd transfers land worth £1,000,000 to River Ltd, with no payment.
North Ltd then sells Field Ltd to an outside buyer. River Ltd remains under North Ltd.
On the facts used in HMRC’s example, relief is not withdrawn, despite Field Ltd and River Ltd no longer being in the same group and the land later rising to £1,750,000.
Why this can be difficult in practice
People often concentrate on the fact that the two companies are no longer together. That alone is insufficient.
You must establish why they separated.
- A sale of shares in the receiving company may give a different result.
- Rights to profits and assets can affect whether companies form a group.
- Plans made before the land transfer can matter under separate anti-avoidance rules.
- The HMRC example is guidance, not the law itself.
There is also a date issue. HMRC’s example is from 2006, while the supplied current legislation includes later amendments.
For historic transactions, the law in force at the time needs careful checking.
Key takeaways
- It matters which company leaves the group.
- A sale of the selling company does not automatically remove group relief.
- Check later control changes and the historic law for the transaction date.
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 — companies qualifying as members of the same group
- FA 2003 Schedule 7 para 3 — when group relief can be withdrawn after separation
- FA 2003 Schedule 7 para 4ZA — exception where the selling company leaves the group
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 HMRC example happened in 2006. The supplied consolidated text records current legislation, including a provision inserted later, so the legislation in force on the transaction date needs checking before relying on the example for a historic case.
- Whether one company has left a group can depend on the full share, profits and asset rights, not simply the headline percentage of shares.
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 group chart immediately before the land transfer
- The group chart immediately after the share sale
- Share sale agreements and any linked arrangements
- Documents showing which company still held the land
- The effective date of the land transfer
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 group relief when the selling company leaves [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 - companies qualifying as members of the same group https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/1/2025-11-17 - FA 2003 Schedule 7 para 3 - when group relief can be withdrawn after separation https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/3/2025-11-17 - FA 2003 Schedule 7 para 4ZA - exception where the selling company leaves the group https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/4ZA/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/sdltm23090f 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 HMRC example happened in 2006. The supplied consolidated text records current legislation, including a provision inserted later, so the legislation in force on the transaction date needs checking before relying on the example for a historic case. - Whether one company has left a group can depend on the full share, profits and asset rights, not simply the headline percentage of shares. 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 group relief when the selling company leaves
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