Stamp duty when you sell a property to your connected company
Connected company transfers
A sale to your connected company may use market value for SDLT, rather than a lower agreed price.
- Check whether you and the company are connected.
- Compare the price with market value on the effective date.
- Check whether a statutory exception applies.
Scroll down for the full analysis.
Read the original guidance here:
Stamp duty when you sell a property to your connected company
Stamp duty when you sell a property to your connected company
If you sell your home or other property to a company that has a connection with you, stamp duty may use its market value instead of the price in the transfer. That can require you to work out SDLT on a larger amount. You must determine whether a statutory connection links you and the company.
What this rule is about
People sometimes move property into a company for a price they choose, expecting the chosen amount always to set the stamp duty bill when they complete the transfer. It may not.
The law can impose a floor. Where the rule applies, SDLT uses whichever figure is higher: the price in the transfer or the property’s market value on the effective date.
That distinction can be costly.
What the official source says
HMRC’s manual gives an example of an individual transferring freehold residential property to a company for £170,000. HMRC says that, before anyone considers valuation or the amount in the transfer, the first issue is whether the individual and company meet the statutory test for connection. That test comes first.
- If no statutory connection links them, HMRC says SDLT uses £170,000.
- If a statutory connection links them, FA 2003 section 53 may apply.
- Section 53 sets a minimum based on market value at the effective date.
- If market value is £275,000, SDLT uses that higher figure.
- If market value is £150,000, SDLT still uses the £170,000 price.
HMRC’s manual is guidance, not law. Section 53 supplies the legal rule, and section 54 also contains exceptions.
What this means in practice
Although connection can bring section 53 into play, SDLT uses a higher figure only when the property’s market value exceeds the agreed price on the effective date. Connection alone is not enough.
Put simply, when a connected company pays more than market value, section 53 does not reduce the figure SDLT uses, because the provision operates only as a minimum. It prevents below-market pricing.
- Start with the price in the transfer.
- Check whether a statutory connection links you and the company.
- Find the property’s market value on the effective date.
- Use the higher figure if section 53 applies.
- Then work out SDLT using the rates that apply to that transaction.
How to analyse it
Ask the questions in this order. First ask whether the connected-company rule applies, because valuation matters only when that rule applies and cannot settle the issue by itself. Start there.
- What property is the company receiving?
- What amount is the company giving for it?
- What is the transaction’s effective date?
- Does Corporation Tax Act 2010 section 1122 treat you and the company as connected?
- What was the open-market value on that date?
- Does one of the section 54 exceptions apply?
Keep the documents that answer each question. A shareholding chart and a sound valuation may matter as much as the signed transfer.
Example
Assume A transfers a freehold residential property to company B for £170,000. If no statutory connection links A with B, HMRC’s example uses £170,000. If a statutory connection links A and B and the market value is £275,000, SDLT uses £275,000.
Change one fact. If a statutory connection links A and B but the market value is only £150,000, SDLT still uses £170,000. The market-value rule does not substitute a lower amount.
Why this can be difficult in practice
This is the part people get wrong: an agreed price is not always the tax figure. Connection and value are separate questions, and both need evidence.
- Owning shares may be relevant, but the full statutory connection test decides the point.
- A later valuation may not show the value on the effective date.
- Calling a sum a family or company arrangement does not settle the SDLT position.
- Section 54 can disapply section 53 in limited cases.
- The source does not provide enough facts to decide whether an exception applies.
Key takeaways
- A connected company transfer can trigger a market-value minimum.
- SDLT may use the higher of price and market value.
- Check connection, value, date and any exception.
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 53 — minimum market value for connected company transfers
- FA 2003 section 54 — exceptions to connected company market value rule
- an Act of 2010 we do not have an identifier for section 112 — test for whether people and companies are connected (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
- Whether a person is connected with a company depends on the statutory test and the full ownership and control facts.
- A market value needs evidence. The source does not explain how it should be valued.
- The transaction date is not given. The statutory material supplied is current only to 17 November 2025, so later law must be checked before relying on this page for a later transaction.
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 company’s ownership, voting rights and control arrangements
- The transfer document and the price actually paid
- A valuation showing the property’s market value at the effective date
- Facts showing whether an exception in FA 2003 s.54 applies
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 when you sell a property to your connected company [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 53 - minimum market value for connected company transfers https://www.legislation.gov.uk/ukpga/2003/14/section/53/2025-11-17 - FA 2003 section 54 - exceptions to connected company market value rule https://www.legislation.gov.uk/ukpga/2003/14/section/54/2025-11-17 - an Act of 2010 we do not have an identifier for section 112 - test for whether people and companies are connected HMRC's guidance page on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm30221 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 a person is connected with a company depends on the statutory test and the full ownership and control facts. - A market value needs evidence. The source does not explain how it should be valued. - The transaction date is not given. The statutory material supplied is current only to 17 November 2025, so later law must be checked before relying on this page for a later transaction. 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 when you sell a property to your connected company
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