Stamp duty when a company takes land from a company partnership
In brief
HMRC’s example shows how a company partnership land transfer can produce an SDLT value based on market value rather than cash paid.
- Company B had a 50% partnership share before receiving all the land.
- HMRC treats 50% of the £5 million market value as the relevant amount.
- Group relief may be relevant, but it needs separate checks.
Scroll down for the full analysis.
Read the original guidance here:
Stamp duty when a company takes land from a company partnership
Stamp duty when a company takes land from a company partnership
When a partnership transfers land to a company, stamp duty may be based on the land’s market value, even if no cash changes hands. In HMRC’s example, a company that held 50% of the partnership ends up with a stamp duty value of £2.5 million.
What this rule is about
This narrow rule applies to a partnership whose members are all companies. It matters when the partnership transfers land to one company.
You might think the answer is simply the price on the transfer document. It is not. Instead, the partnership rules use the market value of the land and measure how much of that value remains with people who already had a share.
That distinction can decide a large stamp duty bill.
What the official source says
HMRC’s manual gives an example involving Companies A and B. Each held a 50% share in the partnership before the land transfer. Afterwards, Company B owns all of the land.
HMRC works through five steps to find the total of the lower proportions. That total determines the amount treated as paid for SDLT purposes.
- Company B is a relevant owner because it receives a share of the land and was a partner just before the transfer.
- Because Company B was a partner immediately before the transfer and also owns the land afterwards, it serves as its own corresponding partner. No separate person takes part.
- Company A is not a corresponding partner in this calculation because it is a company, not an individual connected with Company B.
- Company B takes 100% of the land, so the allocation gives Company B all of that 100%.
- Company B’s lower proportion is 50%, because its earlier partnership share of 50% is lower than 100%.
- Accordingly, the total lower proportions is 50%.
For partnerships made up wholly of companies, the special rule applies only when the total reaches at least 75% after considering every relevant allocation. Here it is 50%, so HMRC says that rule does not apply.
What this means in practice
In this example, the normal result is that half the land’s market value counts as the amount paid for stamp duty purposes. HMRC gives the market value as £5 million, so the figure is £2.5 million.
This does not mean the SDLT itself is £2.5 million. The applicable rates on the transaction date determine SDLT on that value.
- Do not assume a transfer with no cash payment has no SDLT value.
- Check the profit-sharing share, not just the name on the land title.
- Record the market value at the transfer date.
- Keep the earlier partnership and tax records used in the calculation.
How to analyse it
Start with the facts before doing any maths. Ask not simply who receives the land. Ask who had the economic share in the partnership before the transfer.
- Confirm that the land is leaving a partnership.
- Check whether every partner was a company immediately before the transfer.
- List everyone entitled to the land immediately afterwards.
- For each person, identify the matching partner from immediately before the transfer.
- Work out the amount of land allocated to each matching partner.
- Compare that figure with that partner’s attributable partnership share.
- Add the lower figures together.
- Test whether the result reaches 75%.
There is another important check. A partner’s attributable share is not always the share shown in a recent set of accounts. Depending on the land’s earlier transfer into the partnership and on later changes in partnership shares, the legislation can require both matters to be reviewed. Check the history.
Example
Company A and Company B each hold 50% of a partnership. In this example, the partnership owns land worth £5 million. The partnership transfers the land to Company B, which then owns 100% of it.
Company B receives 100% of the land. Yet its attributable partnership share is 50%. The lower figure is 50%. As it is the only matching partner, the total is 50%.
HMRC’s calculation is therefore 50% of £5 million: £2.5 million. The 75% all-company rule does not switch the figure to the full £5 million.
Why this can be difficult in practice
This calculation looks simple only after the facts have been agreed. Over time, partnership shares can change, while the figures may fail to match the legal documents, accounts and land records.
The source also says group relief may be available because the companies are in the same group. That is HMRC’s view in this example, not an automatic result.
- Being in the same corporate group is not enough on its own.
- Group relief has tests about ownership, planned changes of control and the purpose of the arrangements.
- The relief can be withdrawn in some later events.
- Nothing in the supplied legislation clearly confirms the manual’s statement about modified group relief for this type of transfer.
Key takeaways
- A company taking partnership land may face stamp duty on a market-value amount.
- A 50% historic partnership share produced a £2.5 million SDLT value in HMRC’s £5 million example.
- Check the transaction date, partnership history and group-relief conditions before relying on the result.
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 SDLT rules to partnerships
- FA 2003 Schedule 15 para 18 — sets consideration for land leaving a partnership
- FA 2003 Schedule 15 para 20 — calculates the sum of lower proportions
- FA 2003 Schedule 15 para 21 — defines a partner’s attributable partnership share
- FA 2003 Schedule 15 para 24 — special rule for all-company partnerships
- FA 2003 Schedule 15 para 25 — preserves other SDLT reliefs subject to exceptions
- FA 2003 Schedule 15 para 27 — modifies group relief for specified partnership transactions
- FA 2003 Schedule 7 para 1 — gives group relief for qualifying company transfers
- FA 2003 Schedule 7 para 2 — restricts group relief for certain arrangements
- FA 2003 section 62 — requires Schedule 7 relief to be claimed
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 supplied current text of Schedule 15 paragraph 27 expressly modifies group relief for transactions under paragraphs 10 and 17, not paragraph 18. HMRC’s manual says the modified provisions apply in this example, so the statutory basis of that statement cannot be confirmed from the supplied materials.
- The source does not give the transfer date. The correct law and any relief must be checked for that date.
- The source says the companies are grouped but does not provide the ownership facts needed to test group relief.
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 profit-sharing records before the transfer
- documents showing who owns the land immediately after the transfer
- a valuation supporting the £5 million market value
- records of when the partnership obtained the land and SDLT paid then
- the group structure and any planned sale or change of control
- the transaction’s effective date
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 company takes land from a company partnership [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 SDLT rules to partnerships https://www.legislation.gov.uk/ukpga/2003/14/section/104/2025-11-17 - FA 2003 Schedule 15 para 18 - sets consideration for land leaving a partnership https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/18/2025-11-17 - FA 2003 Schedule 15 para 20 - calculates the sum of lower proportions https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/20/2025-11-17 - FA 2003 Schedule 15 para 21 - defines 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 24 - special rule for all-company partnerships https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/24/2025-11-17 - FA 2003 Schedule 15 para 25 - preserves other SDLT reliefs subject to exceptions https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/25/2025-11-17 - FA 2003 Schedule 15 para 27 - modifies group relief for specified partnership transactions https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/27/2025-11-17 - FA 2003 Schedule 7 para 1 - gives group relief for qualifying company transfers https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/1/2025-11-17 - FA 2003 Schedule 7 para 2 - restricts group relief for certain arrangements https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/2/2025-11-17 - FA 2003 section 62 - requires Schedule 7 relief to be claimed https://www.legislation.gov.uk/ukpga/2003/14/section/62/2025-11-17 HMRC's guidance page on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm33860 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 supplied current text of Schedule 15 paragraph 27 expressly modifies group relief for transactions under paragraphs 10 and 17, not paragraph 18. HMRC's manual says the modified provisions apply in this example, so the statutory basis of that statement cannot be confirmed from the supplied materials. - The source does not give the transfer date. The correct law and any relief must be checked for that date. - The source says the companies are grouped but does not provide the ownership facts needed to test group relief. 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 company takes land from a company partnership
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