Stamp duty when a company takes land from a partnership
In brief
HMRC’s manual says an all-company partnership transfer to a connected company can be taxed on full market value. It also says group relief may be available.
- Connection and group membership are different tests.
- Market value can replace the price paid.
- The manual’s group-relief statement needs date-specific legal verification.
Scroll down for the full analysis.
Read the original guidance here:
Stamp duty when a company takes land from a partnership
If a partnership moves land to a connected company, stamp duty can be based on the land’s market value rather than the price paid. HMRC says group relief may help where the companies are in the same group. That point needs careful checking.
What this rule is about
Special stamp duty rules apply to partnerships. They may apply when land moves from the partnership to a partner or to someone connected with a current or former partner.
The source’s example involves two companies, B and C, acting as partners. The partnership transfers land to Company D, which is connected with them.
Cash paid is not the only relevant factor. The law can substitute market value: the amount for which the land could reasonably be sold.
What the official source says
HMRC’s manual says this transfer falls within Schedule 15 paragraph 18 and, if the partnership consists only of companies, a further rule can make the taxable amount the full market value of the land transferred. That is the stated rule.
- The land moves from a partnership to a current or former partner, or a connected person.
- Immediately before the transfer, every partner is a company.
- The lower-proportions total is 75 or more.
- When those conditions hold, Schedule 15 paragraph 24 uses full market value.
- HMRC says the connected-company market value rule also catches the transfer.
- HMRC says the partnership rule takes priority in its example.
HMRC then says B, C and D can claim group relief if they are group companies and meet all conditions. An HMRC manual provides guidance, not law.
What this means in practice
Low prices can still attract stamp duty. No cash payment does not mean there is no stamp duty. In this type of all-company partnership transfer, the starting point may be the full market value.
- Get a proper valuation of the land interest.
- Check who the partners were immediately before the transfer.
- Check whether every partner was a company.
- Work out the lower-proportions total under the partnership rules.
- Map the ownership of each company in the group.
At the effective date, group relief normally requires the companies to be in the same 75% group, but it may also fail because of planned changes in control, outside funding arrangements, or a lack of genuine commercial reasons. Check each condition.
How to analyse it
Start with the transfer itself. Do not begin with the relief claim. First work out the normal stamp duty result, then test whether a relief changes it after identifying the transfer itself, the land, and the date it took effect. That order matters.
- Identify the land and the date the transfer took effect.
- Identify every partner and any connection with the company receiving the land.
- Test whether Schedule 15 paragraph 18 applies.
- Test whether paragraph 24 turns the amount into full market value.
- Check the group ownership tests at the effective date.
- Review all related arrangements, including planned sales or control changes.
- Check the version of Schedule 15 in force on the transaction date.
Example
For illustration, B and C are the only partners. They transfer land worth £1,000,000 to connected Company D. If the all-company rule applies, the taxable amount is £1,000,000 even if D pays less. According to HMRC’s manual, group relief may be claimed if B, C and D meet the group-relief conditions. The tax rate is not considered in this example.
Why this can be difficult in practice
This is where people get it wrong: being connected is different from being in the same qualifying group. Both questions matter, but they serve different purposes.
The source also presents a problem. The supplied current text of Schedule 15 paragraphs 27 and 27A does not clearly extend their modified group-relief rules to a transfer out of a partnership under paragraph 18. That differs from HMRC’s manual example.
- The manual may reflect an earlier statutory version or a view needing further support.
- A company chart alone may not show rights to profits or assets on winding up.
- Documents outside the transfer deed may count as relevant arrangements.
- A valuation dispute can change the stamp duty amount.
Key takeaways
- A partnership-to-company land transfer can use market value.
- Group relief is not automatic just because companies are connected.
- Check the law in force on the transfer date before relying on HMRC’s example.
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 rule for connected company transfers
- FA 2003 Schedule 7 para 1 — when companies qualify for group relief
- FA 2003 Schedule 7 para 2 — restrictions that can prevent group relief
- FA 2003 Schedule 15 para 18 — transfers from partnerships to partners or connected persons
- FA 2003 Schedule 15 para 20 — working out partners’ retained economic shares
- FA 2003 Schedule 15 para 24 — market value rule for all-corporate partnerships
- FA 2003 Schedule 15 para 25 — how exemptions and reliefs interact with partnership rules
- FA 2003 Schedule 15 para 27 — modified group relief for specified partnership transfers
- FA 2003 Schedule 15 para 27A — group relief adjustment for connected corporate partners
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 statutory text limits Schedule 15 paragraph 27 to transfers into a partnership and certain partnership-interest transfers. Paragraph 27A also concerns a calculation for a transfer into a partnership. That does not match the manual’s statement that those paragraphs apply to its transfer from a partnership example.
- It is unclear from the source which transaction date and statutory version the example assumes. The legal basis for any group-relief claim on a transfer out of a partnership needs checking against the law in force on that date.
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 records showing each partner’s share.
- The transfer documents and the effective date.
- A market valuation of the land interest transferred.
- Company ownership charts for B, C and D at the effective date.
- Details of planned sales, control changes, funding and other arrangements.
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 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 53 - market value rule for connected company transfers https://www.legislation.gov.uk/ukpga/2003/14/section/53/2025-11-17 - FA 2003 Schedule 7 para 1 - when companies qualify for group relief https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/1/2025-11-17 - FA 2003 Schedule 7 para 2 - restrictions that can prevent group relief https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/2/2025-11-17 - FA 2003 Schedule 15 para 18 - transfers from partnerships to partners or connected persons https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/18/2025-11-17 - FA 2003 Schedule 15 para 20 - working out partners' retained economic shares 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 - FA 2003 Schedule 15 para 25 - how exemptions and reliefs interact with partnership rules https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/25/2025-11-17 - FA 2003 Schedule 15 para 27 - modified group relief for specified partnership transfers https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/27/2025-11-17 - FA 2003 Schedule 15 para 27A - group relief adjustment for connected corporate partners https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/27A/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/sdltm34230 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 statutory text limits Schedule 15 paragraph 27 to transfers into a partnership and certain partnership-interest transfers. Paragraph 27A also concerns a calculation for a transfer into a partnership. That does not match the manual's statement that those paragraphs apply to its transfer from a partnership example. - It is unclear from the source which transaction date and statutory version the example assumes. The legal basis for any group-relief claim on a transfer out of a partnership needs checking against the law in force on that date. 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 partnership
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