Stamp duty land tax: when partnership rules override market value for connected companies
When partnership rules come first
HMRC says the special Schedule 15 partnership rules determine the SDLT amount where they overlap with the connected-company market-value rule.
- Check whether the transfer is into or out of a partnership.
- Check whether the company is connected.
- Keep clear valuation and ownership evidence.
Scroll down for the full analysis.
Read the original guidance here:
Stamp duty land tax: when partnership rules override market value for connected companies
Stamp duty land tax: when partnership rules override market value for connected companies
When a connected company is part of a property transfer, the market-value rule for stamp duty land tax can apply, but special partnership rules may instead decide the amount.
That matters.
What this rule is about
Section 53 normally stops connected companies using a low price for SDLT. It sets a minimum based on market value.
Partnership transfers have their own system. The overlap can change the figure used for SDLT.
What the official source says
HMRC’s manual says Schedule 15 takes priority where a transfer falls within both section 53 and paragraph 10 or paragraph 18, so the partnership rules determine the amount.
This is HMRC’s view. The manual is not the law itself.
- Section 53 can apply where a company buyer and seller are connected.
- Paragraph 10 covers some transfers of property into a partnership.
- Paragraph 18 covers some transfers of property out of a partnership.
What this means in practice
Do not use section 53 simply because a connected company is involved. First, check whether the transfer is one of the special partnership transfers.
People can miss this.
- The partnership calculation may set the amount used for SDLT.
- A market valuation can still be needed for that calculation.
- The partnership shares before and after the transfer matter.
How to analyse it
Start with the transaction, not its label. Work through the questions in order.
- Who owned the property before the transfer?
- Who owns it afterwards?
- Is a company involved and connected with the other party?
- Is the transfer into or out of a partnership?
- Which Schedule 15 calculation applies?
Example
Sana transfers a site worth £500,000 into a partnership involving her connected company. Assume the Schedule 15 calculation gives 40% of market value: £200,000.
HMRC says Schedule 15 fixes the amount at £200,000, rather than section 53’s £500,000 minimum. Change one fact.
Tom’s connected company buys a £500,000 site. There is no partnership transfer.
Schedule 15 does not apply, and section 53 sets a figure of at least £500,000.
Why this can be difficult in practice
Documents and ownership details that look unimportant at first can decide the answer, and the transfer deed alone may not show a company connection or a partnership share.
They matter.
- Calling an arrangement a partnership does not settle the issue.
- Using a low cash payment does not remove the need for a valuation.
- Several linked steps may need to be considered together.
Key takeaways
- Check the partnership rules before applying section 53 alone.
- HMRC says Schedule 15 has priority in this overlap.
- Ownership, connection and value records are central.
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 53 — market value floor for connected company transfers
- FA 2003 section 104 — special SDLT rules for partnership transactions
- FA 2003 Schedule 15 para 10 — property transfers into a partnership
- FA 2003 Schedule 15 para 18 — property transfers out of a partnership
- an Act of 2010 we do not have an identifier for section 112 — connected person tests used by section 53 (no link: an Act of 2010 we do not have an identifier for)
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 source states HMRC’s view on priority. It does not give the full reasoning or every possible transaction pattern.
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 transfer documents and completion date
- The partnership agreement and each partner’s share
- Company ownership and control records
- A supportable valuation of the land or property
- Details of what each party gave or received
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 Partnership property transfers and connected companies [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 53 - market value floor for connected company transfers https://www.legislation.gov.uk/ukpga/2003/14/section/53/2025-11-17 - FA 2003 section 104 - special SDLT rules for partnership transactions https://www.legislation.gov.uk/ukpga/2003/14/section/104/2025-11-17 - FA 2003 Schedule 15 para 10 - property transfers into a partnership https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/10/2025-11-17 - FA 2003 Schedule 15 para 18 - property transfers out of a partnership https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/18/2025-11-17 - an Act of 2010 we do not have an identifier for section 112 - connected person tests used by section 53 HMRC's guidance page on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm34160 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 source states HMRC's view on priority. It does not give the full reasoning or every possible transaction pattern. 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 31 August 2026
Useful article? You may find it helpful to read the original guidance here: Stamp duty land tax: when partnership rules override market value for connected companies
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