Understanding Chargeable Consideration in Property Investment Partnership Transfers: Type A and B Explained

Which partnership property counts for SDLT when a partnership interest is transferred?

When working out SDLT on the transfer of an interest in a property investment partnership, you do not automatically include all land held by the partnership. The property counted depends first on whether the transfer is Type A or Type B. Type A starts more widely, while Type B has extra exclusions, especially for older property, property covered by a paragraph 12A election, and property not transferred into the partnership under paragraph 10(1)(a) to (c).

• For both Type A and Type B, start with the chargeable interests held as partnership property immediately after the transfer.
• In both cases, exclude property transferred to the partnership in connection with the transfer, market rent leases excluded by paragraph 15, and property not economically attributable to the partnership interest being transferred.
• For Type B transfers, also exclude property transferred to the partnership on or before 22 July 2004, property subject to a paragraph 12A election, and property whose transfer into the partnership did not fall within paragraph 10(1)(a) to (c).
• This means Type B usually includes a narrower pool of partnership property than Type A for SDLT purposes.
• The analysis can be technical because you may need to confirm the transfer type, trace when and how each property entered the partnership, and assess whether it is economically attributable to the transferred interest.

Scroll down for the full analysis.

Which partnership property counts when a share in a property investment partnership is transferred?

This page explains which land interests are taken into account when working out the SDLT chargeable consideration on a transfer of an interest in a property investment partnership. The answer depends on whether the transfer is a Type A transfer or a Type B transfer. That distinction matters because the pool of partnership property brought into the calculation can be wider for Type A transfers and narrower for Type B transfers.

What this rule is about

Special SDLT rules apply when a person transfers an interest in a property investment partnership rather than transferring land directly. In those cases, the tax calculation does not simply look at the price paid for the partnership interest. It also requires you to identify the partnership’s “relevant partnership property”.

The main question on this page is: which chargeable interests held by the partnership are included in that category?

The legislation does not treat every piece of partnership property as relevant in every case. Instead, it applies a set of exclusions. Some exclusions apply to both Type A and Type B transfers. Additional exclusions apply only to Type B transfers.

What the official source says

The official material says that, for a Type A transfer, relevant partnership property means every chargeable interest held as partnership property immediately after the transfer, except for three categories:

• any chargeable interest transferred to the partnership in connection with the transfer;
• a lease excluded by paragraph 15, which deals with market rent leases; and
• any chargeable interest that is not economically attributable to the partnership interest being transferred.

For a Type B transfer, the starting point is the same, but there are further exclusions. So relevant partnership property excludes not only the three categories above, but also:

• any chargeable interest transferred to the partnership on or before 22 July 2004;
• any chargeable interest where an election has been made under paragraph 12A in respect of its transfer to the partnership; and
• any other chargeable interest whose transfer to the partnership did not fall within paragraph 10(1)(a) to (c).

The manual then draws out the practical effect of those extra exclusions: for a Type B transfer, relevant partnership property includes only chargeable interests acquired by the partnership in the circumstances described in paragraph 10(1)(a) to (c).

What this means in practice

If you are analysing a transfer of a partnership interest, you cannot just list all the land owned by the partnership and assume it all counts. You need to identify the correct category of transfer first.

For a Type A transfer, the property included in the SDLT calculation is potentially broad. You start with all chargeable interests held by the partnership immediately after the transfer, then remove the excluded items.

For a Type B transfer, the property included is more restricted. The additional exclusions mean that some partnership property is left out altogether, especially older property, property covered by a paragraph 12A election, and property whose transfer into the partnership was outside paragraph 10(1)(a) to (c).

That can have a major effect on the tax result. Two partnerships with similar property portfolios may produce different SDLT outcomes if the relevant properties entered the partnership in different ways or at different times.

The timing point also matters. The test looks at chargeable interests held as partnership property immediately after the transfer. So the analysis is not based on a historic snapshot, except where the rule specifically asks whether a property was transferred to the partnership on or before 22 July 2004 or whether its transfer fell within paragraph 10(1)(a) to (c).

How to analyse it

A sensible way to approach the issue is as follows.

• First, decide whether the transfer of the partnership interest is a Type A transfer or a Type B transfer. Without that step, you cannot identify the right set of exclusions.
• Next, list every chargeable interest held as partnership property immediately after the transfer.
• Then remove any chargeable interest transferred to the partnership in connection with the transfer itself.
• Remove any lease excluded under paragraph 15 as a market rent lease.
• Remove any chargeable interest that is not economically attributable to the partnership interest being transferred.
• If the transfer is Type B, apply the extra exclusions as well. Ask whether the property was transferred to the partnership on or before 22 July 2004, whether a paragraph 12A election applies, and whether the transfer into the partnership fell within paragraph 10(1)(a) to (c).

The phrase “economically attributable” is important. It means there must be a real economic connection between the property and the partnership interest being transferred. The source does not set out a detailed test on this page, so that part of the exercise may depend on the wider statutory framework and the facts.

For Type B transfers in particular, it is also necessary to understand how and when each property came into the partnership. The legal history of the partnership’s property portfolio can therefore be central to the SDLT analysis.

Example

This is only an illustration based on the source material.

A property investment partnership holds four chargeable interests immediately after a transfer of a partnership interest:

• Property 1 was contributed to the partnership years ago in circumstances falling within paragraph 10(1)(a) to (c).
• Property 2 was transferred to the partnership on or before 22 July 2004.
• Property 3 is a market rent lease within paragraph 15.
• Property 4 was transferred to the partnership in connection with the current transfer.

If the current transfer is Type A, the starting point is all four properties, but Properties 3 and 4 are excluded. Property 2 is not excluded merely because it was transferred before 22 July 2004, because that additional exclusion applies only to Type B transfers.

If the current transfer is Type B, Properties 3 and 4 are again excluded, and Property 2 is also excluded because it was transferred to the partnership on or before 22 July 2004. On these facts, only Property 1 may remain relevant, assuming it is economically attributable to the partnership interest being transferred and no paragraph 12A election applies.

Why this can be difficult in practice

The manual page is short, but the real-world analysis can be quite technical.

First, everything depends on whether the transfer is Type A or Type B. This page assumes that classification has already been made, but in practice that can itself be a separate legal exercise.

Second, the rule uses concepts that require judgement, especially whether a chargeable interest is “economically attributable” to the transferred partnership interest. The answer may not be obvious from title documents alone.

Third, for Type B transfers, the history of each property matters. You may need to establish when the partnership acquired it, whether it was transferred before or after 22 July 2004, whether a paragraph 12A election was made, and whether the original transfer fell within paragraph 10(1)(a) to (c). Missing records can make that difficult.

Fourth, the page refers to other provisions rather than spelling them out. In particular, paragraph 15 affects market rent leases, and paragraph 10(1)(a) to (c) defines the kinds of transfers into the partnership that remain relevant for Type B purposes. So this rule cannot always be applied accurately in isolation.

Key takeaways

• Relevant partnership property is not necessarily all the land held by the partnership; exclusions must be applied carefully.
• Type B transfers have extra exclusions, so the property counted for SDLT may be significantly narrower than for Type A transfers.
• For Type B transfers, the way and date on which property entered the partnership can be critical to the tax calculation.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Understanding Chargeable Consideration in Property Investment Partnership Transfers: Type A and B Explained

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