Changes in Trustee Composition Not Considered Land Transactions for SDLT Purposes

Changing trustees of a continuing trust: when SDLT does not apply

If an existing trust carries on and the only change is who the trustees are, this is generally not treated as a land transaction for SDLT. That means no SDLT is due and no SDLT return should be filed, even if the trust property is mortgaged, provided there is no other separate transaction affecting the property or beneficial ownership.

• For SDLT, trustees of a continuing settlement are treated as one ongoing body, so routine trustee changes do not usually trigger tax.
• No SDLT charge arises where a trustee retires, a new trustee is appointed, or the trustee body is otherwise changed, as long as the trust itself continues on the same terms.
• This remains the case even if the property is subject to a mortgage or other borrowing.
• No SDLT return should be submitted if the only relevant event is the change of trustees of a continuing settlement.
• If HM Land Registry needs to update the title, the application should make clear that it is only a trustee change for a continuing trust, and a covering letter may be needed if that is not obvious.
• The position may differ if something more than a trustee change is happening, such as a change in beneficial ownership or another substantive property transaction.

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Changing trustees of an existing trust: when SDLT does not apply

This page explains an important SDLT point for trusts: if the trust itself continues and only the trustees change, that is generally not treated as a land transaction. In practical terms, that means no SDLT charge arises simply because one trustee retires, another is appointed, or the trustee body is otherwise reconstituted for a continuing settlement.

What this rule is about

SDLT applies to land transactions. The question here is whether a change in the people acting as trustees counts as a new transaction involving the trust property.

HMRC’s position in this material is that, for SDLT purposes, the trustees of a settlement are treated as one single and continuing body of persons. The focus is therefore on the continuing settlement, not on the individual identities of the trustees from time to time.

That matters because trustees often change during the life of a trust. If every such change were treated as a fresh acquisition of the trust property, routine trust administration could trigger SDLT unexpectedly.

What the official source says

The official material states that, for a continuing settlement, a change in the composition of trustees is not a land transaction for SDLT purposes.

The source also makes two practical points:

• there is no SDLT charge on that change, even if the trust property is subject to a mortgage or other borrowing; and
• because there is no land transaction, no SDLT return should be filed.

The source further says that if the change in trustees leads to an application to HM Land Registry, a covering letter should accompany the application unless the documents already make it obvious that the application relates only to a change in trustees of a continuing settlement.

What this means in practice

If land is already held on the terms of an existing trust, and the trust continues on the same footing, replacing or adding trustees does not by itself trigger SDLT.

This remains so even where the land is charged to a lender. In many SDLT situations, taking property subject to debt can amount to chargeable consideration. The point of this guidance is that, where there is no land transaction at all because the trust continues and only the trustee body changes, the existence of a mortgage does not create an SDLT charge.

This is a narrow but useful rule. It is about a change in the composition of trustees of a continuing settlement. It is not a general exemption for all dealings involving trusts. If the underlying beneficial ownership changes, if property is appointed out of trust, or if there is some other substantive land transaction, different SDLT questions may arise.

How to analyse it

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

• Is there a continuing settlement? The rule depends on the trust continuing, rather than the old trust ending and a new arrangement taking its place.
• Has only the trustee body changed? For example, has one trustee retired and another been appointed, with the trust property still held on the same trusts?
• Is there any separate land transaction happening at the same time? A trustee change may be administratively linked to another step that does have SDLT consequences.
• Is the property mortgaged? If so, that does not by itself create SDLT if the only relevant event is the change in trustees of a continuing settlement.
• Is a Land Registry application being made? If yes, the application should usually make clear that this is only a change of trustees of a continuing settlement, and the source suggests using a covering letter where that is not already obvious.

If the answer is that the settlement continues and the only change is who the trustees are, the source indicates there is no land transaction and no SDLT return should be submitted.

Example

A family trust owns a rental property. The property is held by three trustees. One trustee retires and a new trustee is appointed. The trust continues on exactly the same terms, and the property remains subject to an existing mortgage.

On the basis of the official material, this change in trustees is not a land transaction for SDLT purposes. No SDLT charge arises, and no SDLT return should be filed. If the title needs to be updated at HM Land Registry, the application should make clear that the change is only a change in trustees of a continuing settlement.

Why this can be difficult in practice

The main difficulty is identifying whether the case is truly just a change in trustees, or whether something more is happening.

For example, paperwork may describe a transfer of the legal title, but that does not automatically mean there is a land transaction for SDLT. In the trust context, a transfer into the names of replacement trustees may simply reflect the continuing trust structure.

On the other hand, if the documents do more than change the trustee body, the analysis may be different. The source material does not set out the boundaries in detail. So the key practical question is whether the beneficial position under the settlement remains the same and the trust itself continues, or whether the arrangement involves some further disposition of the property.

Another practical issue is administration. Because no SDLT return is required, Land Registry documents should clearly show why SDLT does not arise. If that is not obvious on the face of the papers, the source says a covering letter should be included.

Key takeaways

• A change in the trustees of a continuing settlement is not, by itself, a land transaction for SDLT purposes.
• No SDLT charge arises on that change, even if the trust property is subject to a mortgage or other borrowing.
• If title is being updated at HM Land Registry, the application should make clear that it relates only to a trustee change in a continuing settlement.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Changes in Trustee Composition Not Considered Land Transactions for SDLT Purposes

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