Stamp duty land tax group relief: when a partnership transfer cuts 50% of land value to nil
Group relief and partnership transfers
HMRC’s example shows how paragraph 27A can reduce SDLT where a company transfers land into a partnership that includes another company in the same group.
- The result depends on the lower-proportions calculation.
- A 100% total can leave no amount for SDLT under this rule.
- The group relief restrictions and claim requirements still matter.
Scroll down for the full analysis.
Read the original guidance here:
Stamp duty land tax group relief: when a partnership transfer cuts 50% of land value to nil
Stamp duty land tax group relief: when a partnership transfer cuts 50% of land value to nil
Even where the same business group retains an interest, putting land into a partnership can trigger stamp duty land tax because SDLT may treat part of the land’s value as having moved. Group relief may reduce the charge. In HMRC’s example, the amount used for SDLT falls from half the land’s value to nothing.
What this rule is about
For SDLT purposes, a partnership is not simply a separate legal box that owns land in its own right, because the law looks through the partnership to its partners. This matters where a company transfers land to a partnership in which it, or connected companies, have shares.
The starting point is often market value, rather than merely the cash that changes hands. SDLT then reflects how much of the land’s value has effectively passed away from people who held it before the transfer.
This is why the calculation can seem unusual. It compares ownership of the land before the transfer with the partners’ shares afterwards.
What the official source says
HMRC’s manual sets out an example involving B Ltd, which transfers all of its land interest to a partnership. After the transfer, B Ltd and C Ltd each hold a 50% partnership share. The companies are members of the same group.
Under the normal calculation, B Ltd is a relevant owner because it owned the land before the transfer and remains a partner afterwards. It is also treated as its own corresponding partner.
- First, identify each person who owned a share of the land immediately before the transfer.
- Next, identify the partner or partners who correspond to that owner after it.
- Then divide the old owner’s share of the land between those corresponding partners.
- For each partner, compare that allocated land share with their partnership share.
- Use the lower of the two figures for each partner.
- Finally, add those lower figures together. This total is called the sum of the lower proportions.
Although C Ltd is connected with B Ltd, it would not normally be B Ltd’s corresponding partner merely for that reason; paragraph 27A produces a different result where the companies are in the same group. Paragraph 27A changes the result.
In those circumstances, paragraph 27A considers what SDLT would have been due had C Ltd counted as a corresponding partner. It cuts the actual charge to that lower amount.
What this means in practice
The question is not confined to whether the transferor remains a partner, because you must also establish whether another company in the same group becomes a partner and can increase the lower-proportions total. That may cut the SDLT amount.
Before the transfer in HMRC’s example, B Ltd owned 100% of the land. The calculation may divide that 100% between B Ltd and C Ltd in the most favourable way. HMRC divides it equally: 50% to each company.
- B Ltd receives 50% of the old land interest in the calculation.
- C Ltd receives the other 50%.
- Each company has a 50% partnership share after the transfer.
- The lower figure for B Ltd is therefore 50%.
- The lower figure for C Ltd is also 50%.
- The total is 100%.
With a total of 100%, no market-value amount remains on which SDLT is calculated for this transfer. Without paragraph 27A, HMRC says C Ltd would not count. The total would therefore be 50%, leaving 50% of the land’s market value in the calculation.
How to analyse it
Begin with the real ownership and the terms of the partnership deal. Labels such as “group reorganisation” do not resolve the SDLT question. Percentages, timing and company links do.
- Check that land is being transferred to a partnership.
- Identify every owner of the land immediately before the transfer.
- Record every partner and each partnership share immediately after it.
- Work out which partners normally correspond to each old owner.
- Check whether a connected company would count if it were an individual.
- Check whether that company and the original owner are in the same group.
- Apply the lower-proportions calculation with and without that company.
- Review the group relief restrictions and any wider arrangements.
- Record the land’s market value at the relevant date.
- Make the group relief claim in the land transaction return, as HMRC’s manual says.
What does the same group mean? The legislation applies a 75% group test. Broadly, one company must be a 75% subsidiary of the other, or both must be 75% subsidiaries of a third company.
Example
Suppose B Ltd transfers land worth £1,000,000 to a partnership. Immediately afterwards, B Ltd and C Ltd each have a 50% partnership share. Both companies are members of the same group.
Where paragraph 27A applies, B Ltd’s former 100% land share may be allocated equally between B Ltd and C Ltd, leaving each company with a lower proportion of 50% and a combined total of 100%. The amount used for SDLT under this rule is £0.
Now alter one fact: C Ltd is not treated as a corresponding partner. B Ltd’s lower proportion is 50%, and the total is 50%. The amount used for SDLT is then 50% of £1,000,000, which is £500,000. HMRC’s example does not show the SDLT rate.
Why this can be difficult in practice
Minor changes can lead to a very different answer. A company may be connected with the old owner without satisfying the statutory group test. Similarly, the stated partnership shares may differ from the rights in the partnership agreement.
Group relief does not apply automatically. Paragraph 27A imports the group relief rules, but changes them. In particular, one restriction concerning who provides or receives the amount paid does not apply here.
- Do not assume that connected companies always count as corresponding partners.
- Do not rely only on a group chart without checking the 75% ownership test.
- Do not use an informal understanding instead of the partnership agreement.
- Do not ignore arrangements for a later change of control or group exit.
- Do not treat HMRC’s manual as a substitute for the legislation.
- Do not assume a nil SDLT calculation removes the need to consider the return and claim.
If you remember only one point, make it this: paragraph 27A can convert a 50% market-value calculation into a nil one. That happens only where the detailed company, group and partnership facts support it.
Key takeaways
- A land transfer into a partnership has its own SDLT calculation.
- A group company partner may reduce the SDLT amount under paragraph 27A.
- Ownership records, partnership shares and group evidence decide 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 Schedule 15 para 2 — how partnership land transactions are treated for SDLT
- FA 2003 Schedule 15 para 10 — how SDLT is worked out on transfers to partnerships
- FA 2003 Schedule 15 para 12 — how to calculate the lower proportions total
- FA 2003 Schedule 15 para 27A — group relief adjustment for connected company partners
- FA 2003 Schedule 7 para 1 — when companies count as members of the same group
- FA 2003 Schedule 7 para 2 — restrictions that can prevent group relief
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 facts do not say what documents, ownership rights or partnership agreement support the stated percentages.
- The transaction date is not given. The statutory text supplied is recorded only up to 17 November 2025, so current-law and effective-date checks are needed.
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.
- Documents showing who owned the land immediately before the transfer
- The partnership agreement and each partner’s share immediately after transfer
- Group structure charts and share ownership records
- Documents showing whether any relevant arrangements exist
- The land value at the transfer date
- The SDLT return and group relief claim
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 a company puts land into 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 Schedule 15 para 2 - how partnership land transactions are treated for SDLT https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/2/2025-11-17 - FA 2003 Schedule 15 para 10 - how SDLT is worked out on transfers to partnerships https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/10/2025-11-17 - FA 2003 Schedule 15 para 12 - how to calculate the lower proportions total https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/12/2025-11-17 - FA 2003 Schedule 15 para 27A - group relief adjustment for connected company partners https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/27A/2025-11-17 - FA 2003 Schedule 7 para 1 - when companies count as members of 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 that can prevent group relief https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/2/2025-11-17 Guidance page from HMRC on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm34390 HOW I WANT YOU TO ANSWER 1. Work from the legislation above. Read it before answering. Guidance from HMRC is its 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 facts do not say what documents, ownership rights or partnership agreement support the stated percentages. - The transaction date is not given. The statutory text supplied is recorded only up to 17 November 2025, so current-law and effective-date checks are needed. 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: when a partnership transfer cuts 50% of land value to nil
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