Stamp duty land tax: group relief can remove a charge on property moved from a partnership
Group relief and partnership property
When a partnership gives property to one company partner, SDLT can be based on the share that has effectively moved from the other partners. In HMRC’s example, that is 50% of market value.
- Calculate the partnership charge first.
- Then test group relief.
- Check the ownership, partnership and wider transaction documents.
Scroll down for the full analysis.
Read the original guidance here:
Stamp duty land tax: group relief can remove a charge on property moved from a partnership
Stamp duty land tax: group relief can remove a charge on property moved from a partnership
A partnership can transfer property to one of its company partners and still trigger stamp duty land tax. In HMRC’s example, the starting charge is based on half the property’s market value. Group relief may then remove that charge if the companies meet the group rules.
What this rule is about
This is not mainly about the cash paid. For partnership tax purposes, the question is how much of the property has, in economic terms, passed from one partner to another.
As a result, a stamp duty charge can arise even where no money changes hands. This can matter a great deal when land is being moved around a company group.
HMRC’s example involves a partnership with two company partners, B Ltd and C Ltd. Both are wholly owned by A Ltd. In this arrangement, the partnership transfers the whole property to B Ltd.
What the official source says
HMRC says the partnership is looked through for this purpose. For that purpose, HMRC treats B Ltd and C Ltd, in substance, as transferring the property to B Ltd through the partnership.
There are five steps in the calculation. It identifies the part of the property that B Ltd already had through the partnership, then works out the part that has come from C Ltd.
- B Ltd is a relevant owner because it was a partner before the transfer and owns part of the property afterwards.
- B Ltd is its own corresponding partner.
- C Ltd is not a corresponding partner in this example because it is a company, not an individual connected with B Ltd.
- B Ltd receives 100% of the property after the transfer.
- B Ltd’s partnership share before the transfer was 50%.
- The lower of those two figures is 50%.
- The total of the lower proportions is therefore 50%.
For SDLT under the partnership rule, market value is multiplied by 100% minus that total. Here, that means 50% of market value.
HMRC then says group relief can apply to the resulting charge. Its example assumes B Ltd and C Ltd are both 100% subsidiaries of A Ltd, although the legal group test is based on a 75% relationship.
What this means in practice
Where B Ltd already held half the property through the partnership before the transfer, and receives the whole property afterwards, the calculation does not tax it again on that half. Instead, the possible SDLT charge reflects C Ltd’s 50% share moving to B Ltd.
That is why a transfer with no cash price can still have a taxable value. It stops the answer depending only on what the group chooses to pay on paper.
- Start with the property’s market value, not only the stated price.
- Work out each partner’s share before the transfer.
- Check which company owns the property after it.
- Test group relief after calculating the partnership charge.
- Do not assume common ownership alone settles the relief question.
Group relief is not automatic: the companies must be in the same qualifying group at the relevant time, and the restrictions on wider arrangements must not block relief before it can be claimed. Those conditions matter.
How to analyse it
Start with one question: who, in economic terms, gives up a share of the property? Here, C Ltd surrenders its 50% share, whereas B Ltd retains the value it already had.
- Confirm that property is leaving a partnership for a current or former partner, or someone connected with one.
- Identify the people or companies with a share immediately after the transfer.
- Identify the matching partners immediately before it.
- Work through the lower-proportion calculation for each matching partner.
- Apply the result to the property’s market value.
- Check whether the special rule for an all-company partnership applies.
- Then test whether B Ltd and C Ltd qualify for group relief.
- Review all planned steps, not just the transfer document.
This order matters. First find the possible SDLT charge. Only then can you see what relief, if any, does to it.
Example
Assume the property is worth £1,000,000. B Ltd and C Ltd each have a 50% partnership share. In this example, the partnership transfers the whole property to B Ltd.
B Ltd owns 100% afterwards, but its lower proportion is 50% because that was its partnership share. The amount used for SDLT is therefore £1,000,000 × 50%: £500,000.
This example does not calculate the final SDLT bill. The applicable tax rates depend on facts not given in HMRC’s example. If group relief is available, it gives relief against the charge identified on that £500,000 amount.
Why this can be difficult in practice
Labels in the accounts may not answer the question. The partnership agreement, profit shares and property documents may reveal a position different from the one people assume.
You might think that two companies under one parent always get group relief. They do not. The relief has detailed ownership and anti-avoidance conditions.
- A stated 50:50 split must match the relevant partnership share under the legislation.
- Market value may need evidence, especially for unusual land or property.
- A company connected with an owner is not always counted in the calculation.
- Plans for a sale, change of control or outside funding can affect group relief.
- The transfer date matters because the law may have changed.
HMRC’s manual gives its view of this fact pattern. The legislation remains the legal test.
Key takeaways
- A partnership transfer can create SDLT without a cash payment.
- The charge can reflect the share moving between partners.
- Group relief may remove that charge, but only if its conditions are met.
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 Schedule 15 para 2 — looks through a partnership to its partners
- FA 2003 Schedule 15 para 18 — sets deemed payment when property leaves a partnership
- FA 2003 Schedule 15 para 20 — calculates partners’ retained economic share
- FA 2003 Schedule 15 para 24 — special rule for all-corporate partnerships
- FA 2003 Schedule 15 para 25 — allows other SDLT reliefs to apply
- FA 2003 Schedule 7 para 1 — group relief for companies in the same group
- FA 2003 Schedule 7 para 2 — restrictions on group relief arrangements
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 source does not give the transaction date. The law in force on that date must be checked.
- The result depends on the partnership agreement, the companies’ ownership and profit rights, the market value, and any wider arrangements.
- HMRC’s manual is guidance. It is not legislation and does not decide the result by itself.
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 each partner’s share immediately before the transfer.
- Documents showing who receives the property after the transfer.
- A market valuation of the property interest transferred.
- Group structure records showing the companies’ share, profit and winding-up rights.
- Documents showing the purpose and surrounding arrangements for the transfer.
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 Group relief when property moves from a partnership to a company [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 Schedule 15 para 2 - looks through a partnership to its partners https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/2/2025-11-17 - FA 2003 Schedule 15 para 18 - sets deemed payment when property leaves a partnership https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/18/2025-11-17 - FA 2003 Schedule 15 para 20 - calculates partners' retained economic share https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/20/2025-11-17 - FA 2003 Schedule 15 para 24 - special 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 - allows other SDLT reliefs to apply https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/25/2025-11-17 - FA 2003 Schedule 7 para 1 - group relief for companies in the same group https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/1/2025-11-17 - FA 2003 Schedule 7 para 2 - restrictions on group relief arrangements https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/2/2025-11-17 HMRC's guidance page on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm34380 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 source does not give the transaction date. The law in force on that date must be checked. - The result depends on the partnership agreement, the companies' ownership and profit rights, the market value, and any wider arrangements. - HMRC's manual is guidance. It is not legislation and does not decide the result by itself. 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 land tax: group relief can remove a charge on property moved from a partnership
Search Land Tax Advice with Google
