Stamp duty when a partnership transfers land to a partner
When paragraph 18 matters
Special SDLT rules can apply when partnership land is transferred to a current or former partner, or to a connected person.
- Ending the partnership does not necessarily end the issue.
- Market value and partnership shares can affect the amount used for tax.
- Records of ownership and partnership shares are important.
Scroll down for the full analysis.
Read the original guidance here:
Stamp duty when a partnership transfers land to a partner
Stamp duty can apply when a partnership passes land or a property interest to a current or former partner, or to someone linked to one. The rule may still matter after the partnership ends. Tax may use the land’s value. Cash paid alone is not decisive.
What this rule is about
Paragraph 18 contains special stamp-duty partnership rules. It addresses an interest in land that moves out of partnership ownership, whether that interest concerns a house, a shop, farmland, or a lease. That is the focus.
The transfer document is not the only question. You must also ask whether the land was held for the partnership business and who receives it.
What the official source says
HMRC’s internal manual says paragraph 18 applies when land moves from a partnership to a current or former partner. Connected recipients can trigger the rule. They may be linked to current or former partners. HMRC’s manual is guidance, not the law itself.
- The land moves from a partnership to a person who is, or has been, a partner.
- The land moves from a partnership to a person connected with a current or former partner.
- A transfer can occur when land held for the partnership stops being partnership property.
- A transfer can also occur when a new interest is created from partnership property but is not partnership property.
What this means in practice
This rule does more than identify the people involved. It can establish a special stamp duty amount where an interest leaves partnership ownership and, after market value is identified, the statutory calculation requires the relevant partnership shares to be considered. The statutory shares adjust market value.
No cash changing hands does not end the stamp duty question. The rules may still use a value-based figure.
- Check transfers made as part of a partner leaving.
- Check land divided when a partnership closes down.
- Check transfers to a partner’s connected person, not just to the partner.
- Keep records of each partner’s share over time.
How to analyse it
Start with the facts before working out the tax. The documents and the partnership’s history matter here.
- Identify the land interest that is leaving the partnership.
- Decide whether it was partnership property immediately before the change.
- Identify every person receiving an interest after the change.
- Check whether each recipient is a current partner, former partner or connected person.
- Work out the market value of the interest transferred.
- Trace the partnership shares needed for the statutory calculation.
Example
Illustration: A partnership owns land worth £500,000. It transfers the whole interest to Amina, a former partner. Assume the statutory share calculation gives a lower proportion of 40%. Paragraph 18 uses £500,000 multiplied by 40%, giving £200,000 as the amount used for the transaction. The actual stamp duty result then depends on the tax rules and the full facts.
Why this can be difficult in practice
People often assume that ending a partnership solves the issue. It does not. Schedule 15 treats property held before a partnership ends as remaining partnership property until it is distributed.
Connection has a statutory meaning. Business association alone cannot settle it.
- Legal ownership and partnership ownership may not tell the same story.
- Old changes in partners’ shares can affect the calculation.
- A transfer to a relative, trustee or company may require a connection check.
- Market value may need evidence, even where the parties agree a lower price.
Key takeaways
- Land leaving a partnership can trigger special stamp duty rules.
- The rule covers current and former partners, plus connected people.
- Check the partnership history, the recipient and the land’s value.
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 15 para 18 — special tax treatment for land leaving partnerships
- FA 2003 Schedule 15 para 20 — working out the lower proportions for transfers out
- FA 2003 Schedule 15 para 21 — when a partner’s share counts for the calculation
- FA 2003 Schedule 15 para 22 — calculating a partner’s attributable partnership share
- FA 2003 Schedule 15 para 37 — when land counts as transferred from a partnership
- FA 2003 Schedule 15 para 39 — the connection test for partnership transactions
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 land was partnership property can depend on the partnership records, agreements and the facts.
- The connection test can be difficult to apply without full details of the people and entities involved.
- The supplied statutory text must be checked against current legislation for a transaction after 17 November 2025.
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 partnership agreement and any later changes
- Land Registry title and transfer documents
- Details of each partner before and after the transfer
- Evidence of any family, trust or company connection
- A market valuation of the land interest
- Records showing how partnership shares have changed
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 a partnership transfers land to a partner [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 15 para 18 - special tax treatment for land leaving partnerships https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/18/2025-11-17 - FA 2003 Schedule 15 para 20 - working out the lower proportions for transfers out https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/20/2025-11-17 - FA 2003 Schedule 15 para 21 - when a partner's share counts for the calculation https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/21/2025-11-17 - FA 2003 Schedule 15 para 22 - calculating a partner's attributable partnership share https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/22/2025-11-17 - FA 2003 Schedule 15 para 37 - when land counts as transferred from a partnership https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/37/2025-11-17 - FA 2003 Schedule 15 para 39 - the connection test for partnership transactions https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/39/2025-11-17 HMRC's guidance page on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm33710 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 land was partnership property can depend on the partnership records, agreements and the facts. - The connection test can be difficult to apply without full details of the people and entities involved. - The supplied statutory text must be checked against current legislation for a transaction after 17 November 2025. 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 a partnership transfers land to a partner
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