Who can pay unpaid stamp duty after group relief is withdrawn?
Unpaid SDLT after group relief withdrawal
The buyer normally owes the SDLT. If it remains unpaid for six months after becoming payable, HMRC may serve a notice on the seller, a qualifying parent company or a controlling director.
- The tax must be finally determined first.
- The notice gives 30 days to pay.
- A payer can recover the amount from the buyer.
Scroll down for the full analysis.
Read the original guidance here:
Who can pay unpaid stamp duty after group relief is withdrawn?
Who can pay unpaid stamp duty after group relief is withdrawn?
If a company claimed group relief and later loses it, the company that bought the property normally owes the stamp duty. But if that SDLT remains unpaid, HMRC can sometimes pursue the seller, a company above the buyer in the group, or a controlling director. That can turn one company’s tax bill into a wider group problem.
What this rule is about
Group relief can remove SDLT where companies in the same group transfer land between themselves, but it may later be withdrawn if the buyer leaves the group in circumstances set out in the law. Extra SDLT may then become due. This page concerns who HMRC may ask to pay if the original buyer does not pay it.
That distinction matters. A parent company or director may have had no role in filing the original SDLT return. They may still receive a payment notice later.
What the official source says
HMRC’s manual describes a recovery rule in Schedule 7 to the Finance Act 2003, which applies only after the amount due from withdrawal has been finally determined and has remained unpaid for six months. Primarily, the buyer remains responsible for SDLT.
- The relief must have been withdrawn.
- The extra SDLT must have been finally determined.
- All or part of it must still be unpaid six months after it became payable.
- HMRC may then serve a notice on the seller.
- HMRC may serve a notice on a qualifying company above the buyer in the group.
- HMRC may serve a notice on a controlling director of the buyer or its controlling company.
A company is above the buyer where the buyer, directly or through another company, is its 75% subsidiary. For this purpose, the relevant period runs from the transaction’s effective date until the buyer leaves the seller’s group.
“Controlling director” is a technical legal term. Broadly, it means a director who controls the company, using the statutory rules about company control. Titles alone do not settle the point.
What this means in practice
Rather than automatically transferring the debt to everyone connected with the buyer, the rule requires HMRC to serve a notice before anyone else can be pursued, while the buyer remains the company expected to pay the SDLT. A notice is required.
- A notice must state the unpaid amount.
- It must require payment within 30 days after it is served.
- HMRC must serve it within three years from the final determination date.
- The notice can cover unpaid SDLT and interest.
- For recovery and appeal purposes, it works like an assessment on the person who receives it.
Although the person who pays can recover the amount from the buyer, the law does not allow them to deduct that payment when working out income, profits or losses for tax purposes. It is not deductible for tax purposes.
Paying HMRC does not settle the cost. It creates a right to recover the payment from the buyer.
How to analyse it
Start with the relief withdrawal, not the recovery notice. You need a clear timeline. Then test each gateway in the order set by the law.
- Identify the company that bought the property and claimed group relief.
- Check why, and when, group relief was withdrawn.
- Confirm the SDLT amount and whether it has been finally determined.
- Find the date when that amount became payable.
- Check whether six months passed with an amount still unpaid.
- Map the group structure during the relevant period.
- Check whether the proposed recipient was the seller, a company above the buyer, or a controlling director.
- Read the notice closely, including the amount and service date.
- Check whether HMRC served it within the three-year limit.
Do not assume that a company now outside the group is safe. The test can look at its position at any time during the relevant period.
Example
Imagine that Oak Ltd transfers a warehouse to its group company, Birch Ltd, using group relief. Birch later leaves the group and the relief is withdrawn. Final SDLT is £200,000. Six months after it became payable, Birch has paid nothing.
HMRC may issue a notice to Oak Ltd. It may also be able to issue one to a company that was above Birch in the group during the relevant period, or to a qualifying controlling director. If Oak pays the £200,000 and any interest under the notice, Oak can seek that amount back from Birch. That £200,000 is not a tax deduction for Oak.
Why this can be difficult in practice
The headline rule is simple. Yet the facts behind it often are not. Ownership can sit through several companies, and control can arise from rights that are not obvious from a Companies House search.
- People may focus on today’s group chart instead of the full relevant period.
- A company may be above the buyer through an indirect 75% chain.
- A director’s job title may not answer whether they had legal control.
- The six-month period runs from when the tax became payable, not simply when the property moved.
- A final determination date may need careful checking where HMRC reviewed the return.
- The notice creates an appeal route, so its wording and date matter.
HMRC’s manual is guidance, not the law. Here, it reflects the statutory recovery framework, but the legislation decides whether a notice can properly be issued.
Key takeaways
- The buyer normally remains responsible after group relief is withdrawn.
- After six months of non-payment, HMRC may pursue specified connected people by notice.
- Someone who pays under a notice can recover the payment from the buyer.
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 85 — buyer normally responsible for paying stamp duty land tax
- FA 2003 Schedule 7 para 3 — when group relief can be withdrawn after leaving group
- FA 2003 Schedule 7 para 5 — other people who can be required to pay unpaid tax
- FA 2003 Schedule 7 para 6 — notice process, recovery rights and tax treatment of payment
- an Act of 2003 we do not have an identifier for section 67 — meaning of director for this recovery rule (no link: an Act of 2003 we do not have an identifier for)
- Corporation Tax Act 2010 ss.450-451 — how control of a company is worked out (could not parse a provision)
- an Act of 2010 we do not have an identifier for section 452 — people included within the director definition (no link: an Act of 2010 we do not have an identifier for)
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 source does not explain how an amount becomes finally determined in every possible case. That depends on the facts and any HMRC enquiry or appeal.
- Whether a person was a controlling director, or whether a company sat above another company, can depend on detailed ownership and control rights.
- The supplied statutory text is current only to 17 November 2025. Current primary legislation should be checked for later transactions or notices.
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 land transaction return and group relief claim.
- Documents showing the group structure from the transaction date until the buyer left the group.
- Share registers, constitutional documents and agreements relevant to control.
- Records showing who held directorships and control rights during the relevant period.
- The final determination, payment history and any HMRC recovery notice.
- Evidence of the property or interest still held when the group link ended.
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 Who can pay unpaid stamp duty after group relief is withdrawn? [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 85 - buyer normally responsible for paying stamp duty land tax https://www.legislation.gov.uk/ukpga/2003/14/section/85/2025-11-17 - FA 2003 Schedule 7 para 3 - when group relief can be withdrawn after leaving group https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/3/2025-11-17 - FA 2003 Schedule 7 para 5 - other people who can be required to pay unpaid tax https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/5/2025-11-17 - FA 2003 Schedule 7 para 6 - notice process, recovery rights and tax treatment of payment https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/6/2025-11-17 - an Act of 2003 we do not have an identifier for section 67 - meaning of director for this recovery rule - an Act of 2010 we do not have an identifier for section 452 - people included within the director definition HMRC's guidance page on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm23100 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 source does not explain how an amount becomes finally determined in every possible case. That depends on the facts and any HMRC enquiry or appeal. - Whether a person was a controlling director, or whether a company sat above another company, can depend on detailed ownership and control rights. - The supplied statutory text is current only to 17 November 2025. Current primary legislation should be checked for later transactions or notices. 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: Who can pay unpaid stamp duty after group relief is withdrawn?
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