How an LLP can prevent stamp duty group relief
Group relief and LLPs
HMRC says an LLP can prevent SDLT group relief where it sits in the ownership chain needed for the 75% test.
- An LLP has no issued share capital.
- Common control is not enough.
- The full legal structure matters.
Scroll down for the full analysis.
Read the original guidance here:
How an LLP can prevent stamp duty group relief
An LLP within a company group can prevent stamp duty land tax group relief. HMRC’s example identifies a straightforward issue: an LLP has no issued shares.
It therefore cannot meet a central part of the 75% ownership test. SDLT may be payable when land moves within the wider structure.
What this rule is about
Group relief can remove SDLT on qualifying transfers. It applies when land moves between companies in the same group.
The purpose is to prevent a tax charge arising simply because a group reorganises its property.
However, the group must satisfy a precise ownership test. A chart that appears to show one business group may not be enough.
What the official source says
HMRC’s manual considers a transfer of land from E Ltd to B Ltd and says that the special partnership rules do not apply because the land is not being transferred to or from a partnership.
It then considers group relief directly.
- The buyer and seller must be companies in the same group on the relevant date.
- A company includes a body corporate.
- A 75% parent-subsidiary link is required. Alternatively, both companies may be 75% subsidiaries of a third company.
- The test requires ownership of at least 75% of ordinary share capital, alongside rights to at least 75% of profits and assets on winding up, for the required ownership relationship to exist.
- HMRC says an LLP cannot qualify because it has no issued share capital.
What this means in practice
You might assume that common control is enough. It is not.
An LLP may interrupt the 75% chain. This can happen when the ownership route between two companies passes through it.
That does not mean every transfer involving an LLP fails. Map the legal ownership route.
Do not rely on a group chart.
- Check who owns shares in each company.
- Check whether an LLP sits between two companies in that route.
- Do not treat LLP membership rights as issued share capital.
- Work out the SDLT position before the land is moved.
How to analyse it
Start with the transfer itself. Then examine the ownership structure one step at a time.
- Identify the company transferring the land and the company receiving it.
- Check whether the transfer is to or from a partnership, since that may bring in Schedule 15 where the transaction falls within the special partnership rules.
- Draw every company and LLP between the two companies.
- Test the 75% ownership, profit and winding-up rights at each required point.
- Check the additional limits on group relief, including arrangements linked to a planned sale or tax avoidance.
Example
Imagine E Ltd owns all the membership rights in an LLP. The LLP owns all 100 ordinary shares in B Ltd. E Ltd transfers a warehouse to B Ltd.
HMRC’s view is that E Ltd cannot show indirect 75% share ownership through the LLP, because the LLP has no issued share capital.
On that basis, group relief is unavailable and SDLT is due without it. The tax is not calculated in this example, as it depends on the facts of the transfer.
Why this can be difficult in practice
This is the point people often miss: an LLP can be a body corporate, but that does not mean it has issued share capital. Those are different things.
HMRC’s manual gives its view of the law, rather than the law itself. The result still depends on the statutory test and the actual documents.
- A trading-group chart may hide the legal ownership chain.
- Names such as “Ltd” and “LLP” do not prove the ownership rights.
- The source example does not give every fact needed for another group’s result.
- The supplied legislation needs checking for transfers after 17 November 2025.
Key takeaways
- An LLP in the ownership chain can block group relief.
- The 75% test is about legal rights, not common business control.
- Check the full structure before land is transferred.
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 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 1 — which entities count as partnerships including LLPs
- FA 2003 Schedule 15 para 9 — partnership transfers covered by special SDLT rules
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 source does not show the full group structure, so it cannot decide a different set of company and LLP arrangements.
- The supplied statutory text is current only to 17 November 2025. A transaction after that date needs a current-law check.
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.
- a diagram showing every company and LLP in the ownership chain
- company registers and constitutional documents
- details of membership rights in each LLP
- share registers showing issued share capital and beneficial ownership
- the transfer documents and the date tax treats the transfer as taking place
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 How an LLP can prevent stamp duty group relief [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 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 1 - which entities count as partnerships including LLPs https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/1/2025-11-17 - FA 2003 Schedule 15 para 9 - partnership transfers covered by special SDLT rules https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/9/2025-11-17 HMRC's guidance page on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm34480 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 source does not show the full group structure, so it cannot decide a different set of company and LLP arrangements. - The supplied statutory text is current only to 17 November 2025. A transaction after that date needs a current-law check. 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: How an LLP can prevent stamp duty group relief
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