When a company partnership transfer uses full market value for SDLT
Full market value can apply
A transfer from a partnership made up wholly of corporate bodies may be taxed by reference to full market value.
- All partners must be corporate bodies.
- The lower proportions total must be 75 or more.
- The statutory calculation is fact-sensitive.
Scroll down for the full analysis.
Read the original guidance here:
When a company partnership transfer uses full market value for SDLT
When a company partnership transfer uses full market value for SDLT
A property transfer out of a partnership can trigger stamp duty land tax even where little or no cash changes hands. If every partner is a corporate body, the lower proportions total reaches 75, and the transfer is one paragraph 18 covers, SDLT uses the full market value of the property interest transferred. Full market value sets the SDLT amount.
What this rule is about
This rule covers a partnership that transfers a property interest to a current or former partner, or to someone connected with one. It may also apply after a partnership ends. Property waiting to be shared out can still be partnership property.
In most cases, the SDLT amount may reflect how much of the property has in effect moved outside the partnership. In the cases below, paragraph 24 replaces that result.
What the official source says
HMRC’s manual summarises paragraph 24 of Schedule 15. Paragraph 24 applies only if every condition is met just before the transfer.
- The transfer must be one covered by paragraph 18.
- Every partner must be a body corporate, such as a company.
- The lower proportions total must be 75 or more.
- If those conditions are met, the amount treated as paid is the full market value of the property interest transferred.
That is the key change. Paragraph 18 no longer uses its normal proportion-based calculation.
What this means in practice
Do not assume a transfer to a company partner is taxed only by its share in the partnership. Once paragraph 24 applies, SDLT is worked out using the full value.
- Get a reliable market valuation for the transfer date.
- Check the legal status of every partner just before the transfer.
- Work out the lower proportions before deciding which rule applies.
- Check lease terms separately if the arrangement includes rent.
How to analyse it
Start with the transfer itself. Legal ownership and the partnership facts decide the answer. What the parties call the deal does not decide it.
- Find the property interest leaving the partnership.
- Check whether the recipient is a current or former partner, or connected with one.
- List every partner immediately before the transfer.
- Confirm whether each partner is a body corporate.
- Work out the lower proportions total under paragraph 20.
- If the total is 75 or more, use full market value rather than a reduced proportion.
Example
Northside LLP has only company partners. It transfers a warehouse to one of them. The warehouse is worth £1 million, and the lower proportions total is 80. Paragraph 24 applies. The SDLT calculation therefore uses £1 million, not £800,000.
This example does not calculate the tax due. The applicable SDLT rates depend on the land and the transaction date.
Why this can be difficult in practice
Here, 75 is not a simple shareholding test. Paragraph 20 compares the property entitlement after the transfer with the relevant partnership share. Past changes in the partnership can matter.
- A company may not be the only type of body corporate.
- Partnership accounts may not show the shares needed for the statutory calculation.
- A low cash payment does not remove the need to establish market value.
- HMRC’s manual is guidance, not the law; Schedule 15 is the legal source.
Key takeaways
- All partners must be corporate bodies immediately before the transfer.
- A lower proportions total of 75 or more triggers the full-value rule.
- Good records of ownership, partnership shares and value are essential.
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 — applies the partnership rules in schedule 15
- FA 2003 Schedule 15 para 18 — property transfers from partnerships to partners or connected people
- FA 2003 Schedule 15 para 19 — special treatment where the transfer includes rent
- FA 2003 Schedule 15 para 20 — how to calculate the lower proportions total
- FA 2003 Schedule 15 para 24 — market value rule for all-corporate 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
- Whether an entity is a body corporate can depend on its legal form.
- Working out the lower proportions requires the ownership and partnership-share facts before and after the transfer.
- The statutory copy used for this page is current only to 17 November 2025. A transaction after that date needs a current-law check.
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.
- partnership agreement and any amendments
- company and partner details immediately before the transfer
- records of each relevant ownership share
- documents showing the property interest transferred
- a supportable market valuation at the transfer date
- lease terms where rent forms part of the arrangement
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 When a company partnership transfer uses full market value for SDLT [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 - applies the partnership rules in schedule 15 https://www.legislation.gov.uk/ukpga/2003/14/section/104/2025-11-17 - FA 2003 Schedule 15 para 18 - property transfers from partnerships to partners or connected people https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/18/2025-11-17 - FA 2003 Schedule 15 para 19 - special treatment where the transfer includes rent https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/19/2025-11-17 - FA 2003 Schedule 15 para 20 - how to calculate the lower proportions total https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/20/2025-11-17 - FA 2003 Schedule 15 para 24 - market value rule for all-corporate partnerships https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/24/2025-11-17 HMRC's guidance page on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm33840 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 an entity is a body corporate can depend on its legal form. - Working out the lower proportions requires the ownership and partnership-share facts before and after the transfer. - The statutory copy used for this page is current only to 17 November 2025. A transaction after that date needs a current-law check. 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: When a company partnership transfer uses full market value for SDLT
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