Stamp duty when you transfer a home to a connected company
In brief
A home transferred to one company in return for shares in another can trigger SDLT based on market value. A connection with either company is the key issue.
- Check both companies, not only the one receiving the home.
- Compare the property’s market value with the shares’ market value.
- Check the law and SDLT rates in force on the effective date.
Scroll down for the full analysis.
Read the original guidance here:
Stamp duty when you transfer a home to a connected company
When you transfer a home to a company and receive shares instead of cash, HMRC may base stamp duty on the home’s market value if the connection rules apply. That can happen even when the shares are worth less. Ask whether you have a connection with either company.
What this rule is about
This rule covers a particular company arrangement. You transfer freehold residential property to company B. In return, company C issues new shares to you.
That split matters. One company need not perform both roles.
For stamp duty land tax, or SDLT, treat shares that company C issues in return for the property as value given for it, so you normally start with their market value. Start there.
What the official source says
Before the legislation applies a market-value minimum where either connection exists, HMRC’s manual directs you to check whether you are connected with company B, company C, or both. Either link is enough.
- First, decide whether you are connected with company B, which receives the property.
- Then decide whether you are connected with company C, which issues the shares.
- Without connections, use the shares’ market value.
- Either connection sets the home’s market-value minimum.
- If the shares are worth more than the property, you use the higher share value.
What this means in practice
A home-for-shares transfer can trigger tax. The value of what you receive matters. Your relationship with the companies matters too.
In this example, a connection with the share-issuing company is enough. You do not also need a connection with the company that takes the home.
- Do not look only at the number of shares you receive.
- Work out what those shares are worth at the relevant date.
- Obtain a supportable market value for the home.
- Check control and ownership links with both companies.
- Apply the residential SDLT rate that applies at the transaction’s effective date.
How to analyse it
Start with the real steps, not the label given to the deal. Ask who receives the home, who issues the shares, what links you have with each company, and whether those links satisfy the statutory connected-person test before you calculate SDLT. The roles matter.
- Identify the property you transfer and the company that receives it.
- Identify the company that issues the new shares.
- Apply the statutory connected-person test to you and company B.
- Apply the same test to you and company C.
- Value the home and the shares at the effective date, which is usually completion.
- If either connection exists, compare both values and use the higher amount.
Example
HMRC’s example uses a home worth £275,000. A transfers it to company B and receives new shares in company C. If A has a connection with B or C, calculate SDLT using £275,000 as the minimum amount. If the shares are worth more than £275,000, you use the share value instead. If A is connected with neither company, HMRC says you use the shares’ market value.
Why this can be difficult in practice
The transfer document is often not the difficult part. Proving control, ownership and value is. A family link or a right to control a company may affect the connected-person test.
You might assume that only company B matters because it gets the home. That is wrong for this rule: the link with company C also matters.
- Company structures can hide who really controls a company.
- New shares may be hard to value, especially in a private company.
- You must value the property and shares at the relevant date, not a convenient earlier date.
- Other SDLT rules or reliefs may affect a real transaction and are outside this narrow example.
Key takeaways
- Shares can count as payment for a home transferred to a company.
- A connection with either company can bring in the property-value minimum.
- Keep clear evidence of ownership, control and both market values.
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 4 para 1 — what counts as payment for a land transaction
- FA 2003 section 53 — market value rule for connected company transfers
- FA 2003 section 55 — how the amount of SDLT is calculated
- FA 2003 section 119 — the date used for SDLT purposes
- an Act of 2010 we do not have an identifier for section 112 — when 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 either company depends on the detailed statutory test and the ownership and control facts.
- Market value is fact-sensitive. Both the property and the shares may need supportable valuations.
- The supplied Finance Act 2003 material is current only to 17 November 2025. Current legislation must be checked 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 transfer document and any wider agreement
- Documents showing which company issued the shares
- Share registers, ownership records and control arrangements
- A valuation of the property at the relevant date
- A valuation of the shares issued
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 transfer a home to a 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 Schedule 4 para 1 - what counts as payment for a land transaction https://www.legislation.gov.uk/ukpga/2003/14/schedule/4/paragraph/1/2025-11-17 - FA 2003 section 53 - market value rule for connected company transfers https://www.legislation.gov.uk/ukpga/2003/14/section/53/2025-11-17 - FA 2003 section 55 - how the amount of SDLT is calculated https://www.legislation.gov.uk/ukpga/2003/14/section/55/2025-11-17 - FA 2003 section 119 - the date used for SDLT purposes https://www.legislation.gov.uk/ukpga/2003/14/section/119/2025-11-17 - an Act of 2010 we do not have an identifier for section 112 - when people and companies are connected Guidance page from HMRC on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm30224 HOW I WANT YOU TO ANSWER 1. Work from the legislation above. Read it before answering. Guidance from HMRC is its 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 either company depends on the detailed statutory test and the ownership and control facts. - Market value is fact-sensitive. Both the property and the shares may need supportable valuations. - The supplied Finance Act 2003 material is current only to 17 November 2025. Current legislation must be checked 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 transfer a home to a connected company
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