Stamp duty when land moves from one partnership to another
Partnership-to-partnership transfers
If land moves between partnerships and both partnership transfer rules apply, Schedule 15 paragraph 23 uses the higher of the two results.
- Do two calculations
- Use the higher result
- Check rent and partnership shares separately
Scroll down for the full analysis.
Read the original guidance here:
Stamp duty when land moves from one partnership to another
When land moves from one partnership to another, stamp duty land tax can involve two different calculations. If both apply, the law uses the higher result. It does not add both figures together.
What this rule is about
A partnership transfer can seem simple. One business group gives land to another. Yet the people behind the two partnerships may overlap. That can make the transfer count both as land leaving one partnership and as land entering another.
Paragraph 23 of Schedule 15 deals with that overlap. It stops the same transfer being dealt with separately under both rules. Instead, it tells you to compare the two results.
What the official source says
HMRC’s manual says paragraph 23 applies when an interest in land passes from one partnership to another and the transfer meets both tests. The legislation sets out the same basic approach, although it is more precise about rent.
- The land must move from one partnership to another.
- The transfer must fall within paragraph 10, the rule for land moving into a partnership.
- It must also fall within paragraph 18, the rule for land moving out of a partnership.
- The paragraph 10 and paragraph 18 calculations are not applied directly.
- The amount used is whichever result would have been higher.
Where rent makes up all or part of the consideration for the transfer, the law separately compares the tax that would arise under the two rent rules. Again, the higher result is used.
This matters because rent is not simply treated in the same way as a cash payment. The legislation also preserves a special rent-band effect where it would have applied under either calculation.
What this means in practice
Even though there is only one transfer, begin with two calculations, considering what the outcome would be if the land entered the new partnership and if it left the old partnership. Compare the two. The higher result wins.
- Do not assume that moving land within a wider business group avoids stamp duty.
- Do not treat the old and new partnerships as interchangeable without checking their members.
- Keep a clear record of ownership and profit shares immediately before and after the transfer.
- Check rent separately if the arrangement includes a lease or rental payments.
How to analyse it
The label on the paperwork is not enough. What actually changed, and who was involved at each point, are the questions that matter.
- Identify the land or leasehold interest that has moved.
- Confirm that it was partnership property before the transfer.
- Confirm that it becomes property of the other partnership afterwards.
- Test whether the transfer meets the paragraph 10 conditions.
- Test whether it also meets the paragraph 18 conditions.
- Work out each result and use the higher one.
- Check whether rent is involved and make the separate rent comparison.
- Consider the special all-company partnership rule in paragraph 24.
For these rules, land becomes partnership property when it is held for the partnership business. Land leaves partnership property when it stops being held that way, or when a new interest is granted out of it and is not partnership property.
Example
Anna and Ben run Partnership A. Commercial land moves to Partnership B, where the relevant people have different profit shares. Assume the calculation for land moving into Partnership B gives £60,000, while the calculation for land moving out of Partnership A gives £80,000.
Paragraph 23 uses £80,000 as the amount for the transfer. It does not use £140,000. The figures are illustrative only: the actual figures depend on market value and the shares held by the relevant people.
Why this can be difficult in practice
The hard part is usually not the comparison. It is deciding whether both underlying rules apply at all. That can depend on ownership, connected people, historic changes in partnership shares, and what the agreements really do.
You might think the named partnerships settle the point. They do not. The statutory rules look through a partnership and focus on the partners and their shares.
- A former partner can matter under the rule for land leaving a partnership.
- A connected person can bring a transfer within either underlying rule.
- Profit shares may matter more than the way the parties describe their commercial deal.
- A transfer involving only companies may be subject to paragraph 24 instead.
- A lease with rent needs a separate comparison, not just a cash-price calculation.
HMRC’s manual is useful for showing its view of the provision. It is not the law. The wording of Schedule 15, and the facts of the particular transfer, decide the result.
Key takeaways
- One partnership-to-partnership transfer can trigger two SDLT calculations.
- If both apply, use the higher result rather than both together.
- Membership, profit shares, rent and connected people can change the answer.
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 10 — when a transfer into a partnership is covered; the amount used for a transfer into partnership
- FA 2003 Schedule 15 para 11 — rent treatment for transfers into partnerships
- FA 2003 Schedule 15 para 12 — working out retained shares on a transfer in
- FA 2003 Schedule 15 para 18 — when a transfer out of a partnership is covered; the amount used for a transfer out
- FA 2003 Schedule 15 para 19 — rent treatment for transfers out of partnerships
- FA 2003 Schedule 15 para 20 — working out retained shares on a transfer out
- FA 2003 Schedule 15 para 23 — special rule for transfers between partnerships
- FA 2003 Schedule 15 para 24 — special rule for certain all-company partnerships
- FA 2003 Schedule 15 para 35 — when land becomes partnership property
- FA 2003 Schedule 15 para 37 — when land stops being partnership property
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
- The statutory material supplied is current only to 17 November 2025. The law and the transaction’s effective date need checking if a later change may matter.
- Whether both paragraph 10 and paragraph 18 apply depends on the partnership memberships, connected persons, ownership before and after the transfer, and the transaction documents.
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 agreements and details of each partner’s profit share before and after the transfer.
- The transfer, lease and any related agreements.
- A record of who owned the land before the transfer and who owns it afterwards.
- Market-value evidence and rent details where relevant.
- Details of companies, former partners and connected people involved.
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 land moves from one partnership to another [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 10 - when a transfer into a partnership is covered https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/10/2025-11-17 - FA 2003 Schedule 15 para 10 - the amount used for a transfer into partnership https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/10/2025-11-17 - FA 2003 Schedule 15 para 11 - rent treatment for transfers into partnerships https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/11/2025-11-17 - FA 2003 Schedule 15 para 12 - working out retained shares on a transfer in https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/12/2025-11-17 - FA 2003 Schedule 15 para 18 - when a transfer out of a partnership is covered https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/18/2025-11-17 - FA 2003 Schedule 15 para 18 - the amount used for a transfer out https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/18/2025-11-17 - FA 2003 Schedule 15 para 19 - rent treatment for transfers out of partnerships https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/19/2025-11-17 - FA 2003 Schedule 15 para 20 - working out retained shares on a transfer out https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/20/2025-11-17 - FA 2003 Schedule 15 para 23 - special rule for transfers between partnerships https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/23/2025-11-17 - FA 2003 Schedule 15 para 24 - special rule for certain all-company partnerships https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/24/2025-11-17 - FA 2003 Schedule 15 para 35 - when land becomes partnership property https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/35/2025-11-17 - FA 2003 Schedule 15 para 37 - when land stops being partnership property https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/37/2025-11-17 HMRC's guidance page on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm33810 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 - The statutory material supplied is current only to 17 November 2025. The law and the transaction's effective date need checking if a later change may matter. - Whether both paragraph 10 and paragraph 18 apply depends on the partnership memberships, connected persons, ownership before and after the transfer, and the transaction documents. 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 land moves from one partnership to another
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