Stamp duty when land moves from one partnership to another
Partnership land transfers and SDLT
When land moves from one partnership to another, SDLT can require two calculations. The higher result applies.
- Match people who retain an interest in the land
- Use each person’s lower percentage
- HMRC’s example produces 50% of market value
Scroll down for the full analysis.
Read the original guidance here:
Stamp duty when land moves from one partnership to another
When land passes from one partnership to another, the SDLT calculation can apply twice, so you may need to work out two figures and use the higher one. In HMRC’s example, both figures are 50% of the land’s market value.
What this rule is about
Although moving land between partnerships can look like no more than an internal rearrangement, SDLT does not always treat it that way. The law looks through a partnership and focuses on the people who have shares in it.
This matters where some people have an interest in both the old and new partnerships. The rules can reduce SDLT to reflect the part of the land that, in economic terms, remains with the same people. They do not automatically reduce it to nil.
When the land moves, the key question is how much of it remains matched with the same people throughout the transaction. The calculation answers that question. It does not depend only on the labels used in the partnership documents.
What the official source says
HMRC’s manual gives an example involving two separate partnerships. The first owns land. The second receives some of it. A, B, C and D each have an equal 25% share in the first partnership.
In the second partnership, A has 50%, B has 25%, and E has 25%. No connection links the people. HMRC says the transfer falls within both sets of partnership rules: one for land going into a partnership, and one for land coming out of a partnership.
- The first partnership transfers land to the second partnership.
- A and B each had a 25% share in the first partnership.
- A has a 50% share in the second partnership.
- B has a 25% share in the second partnership.
- E has a 25% share in the second partnership but had no share in the first.
- HMRC does not match E with A or B because E is not connected with either person.
Where both calculations apply, Schedule 15 directs HMRC to use the higher result, even if the two calculations begin from different points. HMRC therefore carries out both calculations. On these facts, they give the same answer.
What this means in practice
The 50% result identifies 50% of the market value as the figure for working out SDLT; it does not mean that SDLT itself equals 50% of the land’s value. The final bill depends on the SDLT rules that apply to that transaction.
In other words, the calculation identifies the taxable part of the value. It does not replace the rest of the SDLT calculation.
- Find the market value of the land being transferred.
- Work out the percentage that remains with matched people.
- Subtract that percentage from 100%.
- Use the result as the proportion of market value for the SDLT calculation.
- Carry out both partnership calculations where the transfer meets both tests.
- Use the higher result if the two answers differ.
You might assume that A’s 50% share in the new partnership saves 50% of the land from SDLT, but that assumption does not work in this example. It does not. A only had a 25% share in the old partnership, so A’s lower figure is 25%.
How to analyse it
Begin with the people and their shares rather than the partnership names, because you need a clear picture of the position before and after the transfer. Small changes in the facts can change the outcome.
- Identify the land that moves from the first partnership to the second.
- List every person with a share in the first partnership before the transfer.
- List every person with a share in the second partnership after the transfer.
- Check whether any people are connected for these rules.
- Apply the calculation for land moving into the new partnership.
- Apply the calculation for land moving out of the old partnership.
- For each matched person, compare their land share with their partnership share.
- Use the lower of those two percentages for that person.
- Add those lower percentages together.
- Compare the two results and take the higher one.
For a transfer into a partnership, the calculation starts by identifying who had an interest in the land before the transfer, whereas a transfer out starts with who has an interest afterwards. That timing difference matters.
Example
Here is HMRC’s example in plain terms. Before the transfer, A and B each have a 25% share in the land through the first partnership. After it, A has a 50% share in the new partnership and B has a 25% share.
For the transfer-into calculation, A’s lower figure is 25% because A’s old land share was 25%, even though A’s new partnership share is 50%. B’s lower figure is also 25%, because both of B’s figures are 25%.
Add those figures together: 25% plus 25% equals 50%. The calculation therefore uses 50% of market value.
For the transfer-out calculation, HMRC gives both A and B a lower figure of 25%, because each person’s relevant lower figure remains 25%. That also totals 50%. If the transferred land is worth £1 million, the figure for the SDLT calculation is therefore £500,000. That is not a statement that the SDLT bill is £500,000.
Why this can be difficult in practice
This example is neat because the shares are simple and no connection links the people. Real arrangements often are not. Usually, the difficult part is proving who has what economic share at each point.
For the transfer-out calculation, the law can also require a review of how and when the land entered the old partnership, including earlier transfers and any tax paid at that time. Those records may matter.
- A partnership agreement may not match the actual economic arrangements.
- Profit shares and capital shares may be different.
- Shares may have changed shortly before the land transfer.
- A family or company connection can change who is matched.
- Land may have entered the first partnership through an earlier transaction.
- The value must relate to the land actually being transferred.
- The source example does not deal with rent, linked deals or special elections.
HMRC’s manual is useful because it shows its approach to the maths. It is not the law itself. The statutory wording and the full facts decide the result.
The supplied statutory text is recorded as current only up to 17 November 2025. If the transfer is later than that, the current legislation should be checked before relying on this example.
Key takeaways
- A partnership-to-partnership land transfer can require two SDLT calculations.
- The higher calculation is used where both rules apply.
- In HMRC’s example, 50% of market value is used for the SDLT calculation.
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 section 104 — how SDLT rules apply to partnerships
- FA 2003 Schedule 15 para 9 — special SDLT rules for certain partnership transfers
- FA 2003 Schedule 15 para 10 — land transferred into a partnership
- FA 2003 Schedule 15 para 12 — calculating retained shares on a transfer in
- FA 2003 Schedule 15 para 18 — land transferred out of a partnership
- FA 2003 Schedule 15 para 20 — calculating retained shares on a transfer out
- FA 2003 Schedule 15 para 21 — working out a partner’s attributable partnership share
- FA 2003 Schedule 15 para 23 — land transferred between two partnerships
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 source does not give the land’s value, the type of property, the transfer date or the full partnership history.
- The source does not explain how the stated 25% attributable shares were established for the transfer-out calculation.
- The statutory material supplied is recorded as current only up to 17 November 2025. A later transaction needs a check against current legislation.
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 any changes to them
- Who owned the land before the transfer
- Each person’s economic share before and after the transfer
- Evidence of any connection between the people involved
- The land’s market value on the relevant date
- Records of the land entering the first partnership and any SDLT paid then
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 section 104 - how SDLT rules apply to partnerships https://www.legislation.gov.uk/ukpga/2003/14/section/104/2025-11-17 - FA 2003 Schedule 15 para 9 - special SDLT rules for certain partnership transfers https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/9/2025-11-17 - FA 2003 Schedule 15 para 10 - land transferred into a partnership https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/10/2025-11-17 - FA 2003 Schedule 15 para 12 - calculating 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 - land transferred out of a partnership https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/18/2025-11-17 - FA 2003 Schedule 15 para 20 - calculating 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 21 - working out a partner's attributable partnership share https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/21/2025-11-17 - FA 2003 Schedule 15 para 23 - land transferred between two partnerships https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/23/2025-11-17 Guidance page from HMRC on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm33820 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 - The source does not give the land's value, the type of property, the transfer date or the full partnership history. - The source does not explain how the stated 25% attributable shares were established for the transfer-out calculation. - The statutory material supplied is recorded as current only up to 17 November 2025. A later transaction needs a check against current legislation. 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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