Definition of “Arrangements” in SDLTM33420 Schedule Explained

Meaning of “arrangements” in SDLT anti-avoidance rules

For SDLT anti-avoidance purposes, “arrangements” is a wide term that covers more than a formal land transfer contract. It can include any scheme, agreement or shared understanding, even if it is informal or not legally enforceable, so HMRC and taxpayers must look at the full commercial picture and any linked steps around the transaction.

• “Arrangements” can include a scheme, agreement or understanding, whether or not it could be enforced in court.
• The rules are not limited to signed contracts or formal documents and may catch informal plans and side agreements.
• When SDLT legislation refers to arrangements, the transaction should be considered as part of any wider planned series of steps.
• Evidence such as emails, board minutes, heads of terms and other communications may help show whether there was a settled plan.
• The key question is the real overall arrangement, not just the legal form of one step or whether the understanding was binding.

Scroll down for the full analysis.

What “arrangements” means for SDLT anti-avoidance rules

This page explains the meaning of “arrangements” in paragraph 40 of the relevant SDLT Schedule. The point matters because anti-avoidance rules often apply where a transaction forms part of wider arrangements. The term is deliberately broad, so it can catch more than a formal contract.

What this rule is about

In SDLT legislation, some rules do not look only at the document that transfers the land. They also look at the wider plan or set of steps surrounding the transaction. Paragraph 40 explains what counts as “arrangements” for that purpose.

The definition is wide. It is designed to stop the rules being avoided simply because the parties did not put everything into a legally binding contract.

What the official source says

The source states that, in this Part of the Schedule, “arrangements” includes any scheme, agreement or understanding, whether or not legally enforceable.

That means the legislation is not limited to:

• formal written contracts,
• documents signed by all parties, or
• obligations that could be enforced in court.

It can also include an informal plan, a shared understanding, or a structured series of steps intended to work together.

What this means in practice

If an SDLT rule applies where there are “arrangements”, you must look at the real overall picture, not just the legal form of one step.

In practice, this can mean that HMRC may consider:

• whether there was a wider scheme behind the land transaction,
• whether connected steps were intended to happen together,
• whether the parties had a common understanding, even if nothing was formally binding, and
• whether the transaction should be analysed as part of a planned set of events rather than in isolation.

The practical consequence is that informal side agreements, pre-planned steps, and non-binding understandings may still matter for SDLT analysis.

How to analyse it

Where a provision refers to “arrangements”, ask the following questions:

• Is there a wider scheme or plan linked to the land transaction?
• Were multiple steps intended from the outset to achieve one overall result?
• Was there an agreement or shared understanding between the parties, even if it was not legally enforceable?
• Do emails, board minutes, heads of terms, or other communications show a settled plan?
• Does the commercial reality suggest the transaction cannot properly be understood on its own?

The key point is that enforceability is not the test. A non-binding understanding can still be an “arrangement” if it forms part of the relevant scheme or agreement.

Example

Illustration: a buyer acquires land under one formal contract, but there is also a separate informal understanding that another connected step will follow as part of the same overall plan. Even if that second step is not legally binding, it may still be part of the “arrangements” for the purposes of the Schedule.

This does not by itself determine the SDLT outcome. It means the informal understanding cannot be ignored simply because it is not enforceable.

Why this can be difficult in practice

The word “arrangements” is very broad, but applying it to real facts can still be difficult. The main difficulty is deciding whether there truly was a scheme, agreement or understanding, or whether events were merely possible, tentative, or independent.

That often depends on evidence. A clear paper trail may show that the parties intended a series of linked steps. In other cases, the facts may be more ambiguous. The existence of an arrangement is therefore often a factual and contextual question, not something that can be answered by looking only at whether there was a binding contract.

Key takeaways

• For this SDLT provision, “arrangements” is wider than a formal legal contract.
• A scheme, agreement, or understanding can count even if it is not legally enforceable.
• When the legislation refers to arrangements, the overall plan and surrounding facts may be as important as the transfer document itself.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Definition of “Arrangements” in SDLTM33420 Schedule Explained

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