Guide on Exemptions for Building Society Land Transactions Under UK Law

SDLT relief for building society amalgamations and transfers of engagements

A land or property transfer may be exempt from Stamp Duty Land Tax if it happens because of a statutory amalgamation of building societies or a transfer of engagements under the Building Societies Act 1986. This is a limited relief, not a general merger exemption, and HMRC says it must be claimed in the SDLT return or by amending that return.

• The relief applies only to building society reorganisations under section 93 (amalgamations) or section 94 (transfers of engagements) of the Building Societies Act 1986.
• The land transaction must be effected by, or happen in consequence of, the statutory reorganisation, so there must be a real link between the property transfer and the legal process.
• If the conditions are met, the transaction is exempt from SDLT.
• HMRC’s guidance says the exemption is not treated as automatic in practice and must be claimed in the land transaction return, or later by amending the return.
• The claim should be made using code 28, labelled “Other reliefs”, in question 9 of the SDLT return.
• Care is needed where the property transfer is only indirectly connected to the wider reorganisation, as more remote transactions may need closer analysis.

Scroll down for the full analysis.

SDLT relief for amalgamations and transfers of engagements involving building societies

This page explains a narrow Stamp Duty Land Tax relief for land transactions connected with certain statutory reorganisations of building societies. If land changes hands because building societies are merging or one society is transferring its engagements to another under the Building Societies Act 1986, the transaction may be exempt from SDLT. The point matters because the exemption is not automatic in practice: the official material says it must be claimed in the land transaction return or by amending that return.

What this rule is about

Normally, SDLT can arise when land or property is transferred. This relief deals with a specific situation where the transfer happens as part of a formal restructuring of building societies under the statutory regime in the Building Societies Act 1986.

The source refers to two kinds of reorganisation:

• an amalgamation of two or more building societies under section 93 of the Building Societies Act 1986, and
• a transfer of engagements between building societies under section 94 of that Act.

Where a land transaction is effected by, or happens in consequence of, one of those statutory processes, it is exempt from charge.

What the official source says

The HMRC manual states that, under section 109A of the Building Societies Act 1986, a land transaction is exempt from SDLT if it is effected by or in consequence of:

• an amalgamation of two or more building societies under section 93, or
• a transfer of engagements between building societies under section 94.

The manual also says the relief must be claimed in a land transaction return or in an amendment to that return. It directs the filer to use code 28, described as “Other reliefs”, at question 9 of the return.

What this means in practice

The practical effect is that a property transfer falling within this rule is not charged to SDLT, provided it is part of, or results from, one of the specified statutory building society transactions.

Two points matter in practice.

First, the transaction must be connected closely enough to the statutory amalgamation or transfer of engagements. The wording “effected by or in consequence of” is wider than a transfer that is itself the central merger step, but it still requires a real link to the statutory process.

Second, the exemption still needs to be claimed procedurally. The manual does not describe it as something HMRC will apply automatically. If a return is required, the claim should be made in that return. If the return has already been filed without the claim, the manual says it can be claimed by amending the return.

How to analyse it

A sensible way to approach the issue is to ask the following questions:

• Is there a land transaction for SDLT purposes?
• Does the transaction involve building societies?
• Is the relevant corporate event an amalgamation under section 93 of the Building Societies Act 1986, or a transfer of engagements under section 94?
• Was the land transaction effected by that event, or did it occur in consequence of it?
• Has the exemption been claimed correctly in the SDLT return, or by amendment if needed?

The key legal issue is usually the connection between the land transfer and the statutory reorganisation. A transfer carried out as part of implementing the amalgamation or transfer of engagements is the clearest case. A more remote or separately negotiated transfer may need closer analysis.

It is also important not to generalise this relief beyond its terms. The source is about building societies and specific statutory procedures under the 1986 Act. It is not a general relief for all mergers, reconstructions, or intra-group transfers.

Example

Illustration: Two building societies amalgamate under section 93 of the Building Societies Act 1986. As part of that statutory amalgamation, land held by one society passes to the successor body. If that land transaction is effected by, or happens in consequence of, the section 93 amalgamation, the source indicates that it is exempt from SDLT. The exemption should then be claimed in the SDLT return using code 28, or by amending the return if it was not claimed originally.

Why this can be difficult in practice

The source material is brief and does not spell out the boundary of the phrase “effected by or in consequence of”. That can matter where there are several steps in a wider reorganisation.

For example, there may be little doubt where land passes automatically or directly under the statutory amalgamation or transfer of engagements. It may be less straightforward where a later property transfer is said to follow from the reorganisation but is not itself obviously required by it.

The manual also does not explain procedural detail beyond saying that the relief must be claimed in the return or by amendment. So, in practice, careful attention is needed to whether a return is being filed, whether the claim has been made in time, and whether the description of the transaction clearly shows the statutory basis for the exemption.

Another possible source of confusion is terminology. The manual uses the word “exempt”, but still says “relief must be claimed”. In practical terms, the important point is that the filer should not assume HMRC will apply the treatment without the claim being made in the prescribed way.

Key takeaways

• A land transaction can be exempt from SDLT if it is effected by or in consequence of a section 93 amalgamation or section 94 transfer of engagements between building societies.
• This is a specific statutory rule for building societies under the Building Societies Act 1986, not a general merger exemption.
• The official material says the treatment must be claimed in the SDLT return, or by amending the return, using code 28.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Guide on Exemptions for Building Society Land Transactions Under UK Law

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