SDLT group relief when an LLP transfers property to a company
SDLT and LLP property transfers
When an LLP transfers property to a company, SDLT can be based on the share that has effectively moved from other partners. In HMRC’s example, that is 50% of market value.
- Work out the partnership calculation first.
- Then test the detailed group relief rules.
- Keep evidence of ownership, value and the wider arrangements.
Scroll down for the full analysis.
Read the original guidance here:
SDLT group relief when an LLP transfers property to a company
SDLT group relief when an LLP transfers property to a company
An LLP transfer can trigger stamp duty land tax even where the property stays within the same wider group. HMRC’s example shows why: the tax rules look through the LLP to its partners. Group relief may then remove the charge, but only if its conditions are met.
What this rule is about
An LLP can own property in its own name. Although the LLP holds the property, for these SDLT rules the law generally treats it as held by the partners instead.
That treatment matters.
Rather than asking whether the LLP and the company are connected, you work out which partners have effectively given up part of the property.
This can matter even if no cash changes hands.
What the official source says
HMRC’s manual considers an LLP that transfers property to B Ltd. Before the transfer, B Ltd and C Ltd each have a 50% partnership share. Both companies are wholly owned by A Ltd.
HMRC applies the special rules for a transfer from a partnership. Those rules compare the share B Ltd receives with its partnership share before the transfer.
- B Ltd receives 100% of the property after the transfer.
- B Ltd was a partner immediately before the transfer.
- So B Ltd is a relevant owner under the statutory calculation.
- B Ltd is also its own corresponding partner.
- C Ltd is not a corresponding partner in this example.
- The lower of B Ltd’s 100% property share and 50% partnership share is 50%.
- The total of the lower proportions is therefore 50%.
The result is a taxable value equal to 50% of the property’s market value. In simple terms, the rules treat C Ltd’s 50% economic share as having moved to B Ltd, rather than treating B Ltd’s existing share as newly acquired.
That distinction is decisive.
B Ltd’s existing 50% share does not create a charge again. The calculation focuses on the part it did not already have through the LLP.
What this means in practice
HMRC says B Ltd and C Ltd are both in the same group because A Ltd owns them both. On those facts, group relief can remove the SDLT charge that the partnership calculation produces.
It is not automatic. The companies must meet the statutory same-group test at the relevant time, and none of the restrictions on relief can apply.
- Check that each company is a body corporate.
- Check the 75% group test, including rights to profits and assets on a winding-up.
- Check whether anyone outside the group funds or receives value from the arrangements.
- Check for plans under which the companies will leave the group.
- Check that the transfer has genuine commercial reasons.
- Claim the relief in the SDLT return, or in a permitted amendment.
You might think shared ownership by A Ltd settles everything. It does not. The wider deal and the future plans can matter just as much.
How to analyse it
Start with the partnership calculation. Only then consider group relief. Reversing that order can hide a tax charge that needs to be reported and relieved.
- Identify the property being transferred from the LLP.
- List every LLP partner immediately before the transfer.
- Record each partner’s partnership share at that point.
- Identify who receives a share of the property immediately after the transfer.
- Match each relevant owner with its corresponding partner.
- Work out the lower proportion for each matching person.
- Add those lower proportions together.
- Apply the statutory formula to the property’s market value.
- Then test whether group relief is available and remains available.
What actually decides the taxable value? Not simply the percentage of property B Ltd receives. It is the comparison between that share and what B Ltd already held through the LLP.
Example
Here is the manual’s example in plain terms. B Ltd and C Ltd each have a 50% share in an LLP. The LLP transfers all of its property to B Ltd.
B Ltd ends with 100% of the property, although immediately before the transfer it held only a 50% partnership share through the LLP. Its lower proportion is therefore 50%. The taxable value is 50% of the property’s market value.
Viewed another way, B Ltd keeps the value it already had, takes over C Ltd’s half, and may obtain group relief because A Ltd owns both B Ltd and C Ltd, if the remaining conditions are satisfied.
The conditions still apply.
Why this can be difficult in practice
Real LLP structures are rarely as neat as the example. Partnership shares may change over time. A company may hold rights through a trust, or the transfer may form part of a larger restructuring rather than being an isolated transaction with no wider context.
Small factual differences can change the answer.
- The LLP agreement may not match the figures shown in the accounts.
- Profit shares and capital shares may be different.
- A company may be connected with a partner without being a partner itself.
- The property value needs support, even where no money is paid.
- Group relief may fail because of arrangements outside the property transfer.
- A later group departure can lead to relief being withdrawn.
HMRC’s manual gives its view of one structure. It does not remove the need to apply the legislation to the actual documents and ownership history.
Key takeaways
- An LLP transfer can create an SDLT charge before relief is considered.
- The calculation measures the share that has effectively moved between partners.
- Group relief may remove that charge where all statutory 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 the taxable value for transfers from partnerships
- FA 2003 Schedule 15 para 20 — calculates retained shares in partnership property transfers
- FA 2003 section 62 — provides group relief and how it is claimed
- FA 2003 Schedule 7 para 1 — sets the same-group test for group relief
- FA 2003 Schedule 7 para 2 — restricts group relief for certain arrangements
- FA 2003 Schedule 7 para 3 — withdraws group relief after certain group departures
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 worked example gives only a simplified ownership structure. Real cases may involve different partnership shares, connected persons, leases, or wider arrangements.
- The correct SDLT rates depend on the property’s type, the transaction date and other facts. They cannot be worked out from this example alone.
- The supplied legislation is current only to 17 November 2025. The position for a later transaction needs checking against current primary legislation.
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 LLP agreement and records showing each partner’s share before the transfer
- Documents showing who receives the property after the transfer
- A supportable market valuation of the property interest transferred
- Group charts and share rights for A Ltd, B Ltd and C Ltd
- Transaction documents and any plans for a sale, reorganisation or change of control
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 SDLT group relief when an LLP transfers property 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 the taxable value for transfers from partnerships https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/18/2025-11-17 - FA 2003 Schedule 15 para 20 - calculates retained shares in partnership property transfers https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/20/2025-11-17 - FA 2003 section 62 - provides group relief and how it is claimed https://www.legislation.gov.uk/ukpga/2003/14/section/62/2025-11-17 - FA 2003 Schedule 7 para 1 - sets the same-group test for group relief https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/1/2025-11-17 - FA 2003 Schedule 7 para 2 - restricts group relief for certain arrangements https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/2/2025-11-17 - FA 2003 Schedule 7 para 3 - withdraws group relief after certain group departures https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/3/2025-11-17 HMRC's guidance page on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm34460 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 worked example gives only a simplified ownership structure. Real cases may involve different partnership shares, connected persons, leases, or wider arrangements. - The correct SDLT rates depend on the property's type, the transaction date and other facts. They cannot be worked out from this example alone. - The supplied legislation is current only to 17 November 2025. The position for a later transaction needs checking against current primary legislation. 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: SDLT group relief when an LLP transfers property to a company
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