SDLT group relief when a company is linked to a partnership
Group relief for partnership transfers
A connected company can sometimes reduce SDLT when property moves into a partnership. It must be in the same group as an original owner and would need to count in the calculation but for the normal individual-only rule.
- This is a specialised partnership rule.
- The wider group relief restrictions still matter.
- HMRC says to claim using code 12 in the return.
Scroll down for the full analysis.
Read the original guidance here:
SDLT group relief when a company is linked to a partnership
A company in the same group as an owner may reduce the stamp duty bill when property moves into a partnership. This is a narrow SDLT rule. It can matter where the normal partnership calculation leaves out a connected company.
What this rule is about
Moving property into a partnership has its own SDLT calculation. In making that calculation, the focus is on how much of the property interest those involved have retained through their partnership shares. That calculation can reduce the part treated as taxable.
At one stage, a person connected with an owner usually counts only if that person is an individual. A company does not normally count. Paragraph 27A provides an exception for certain companies within the same group as that owner.
That distinction sounds narrow. It can change the tax result.
What the official source says
HMRC’s manual says that this special group relief may apply when a connected company would have counted as a corresponding partner if companies could count at that stage. Both the company and the original owner must also be members of the same group.
- Confirm that the transfer is one where the special partnership calculation applies.
- Work out the lower proportions under Schedule 15 paragraph 12.
- Identify the owner who held a share before the transfer.
- Consider whether a connected company would count as that owner’s corresponding partner but for the individual-only rule.
- Check that the company and that owner were in the same group.
- Recalculate the SDLT as if the company had counted.
- Apply group relief to reduce the tax to that recalculated amount.
- Claim the relief in the partnership’s land transaction return, using code 12 under HMRC’s instructions.
In support of the central point, the legislation says that the tax falls to the amount that would have been due if the connected company had counted in the calculation.
What this means in practice
This rule does not make the whole transfer tax-free by default. Instead, it adjusts the result of a particular calculation. Even after the reduction, the partnership may still owe SDLT.
Group relief also has wider conditions. A group normally depends on one company owning at least 75% of another, or both being 75% subsidiaries of a third company. For group purposes, the test covers shares, profits and assets on a winding-up.
- Do not rely on a group name or shared directors alone.
- Check the ownership chain on the effective date of the transfer.
- Check rights to profits as well as voting shares.
- Check rights to assets if the company wound up.
- Review any planned funding, sale or change of control.
- Make the claim in the return rather than assuming HMRC will apply it.
If your solicitor has said SDLT applies, this may be the point worth checking. Yet relief helps only where the company has the required, highly specific link to the original owner and also satisfies the group test. Both conditions matter.
How to analyse it
Start with the property transfer, not the relief label. Ask whether the company would have changed the lower-proportions calculation if the legislation had allowed it to count.
- Confirm that property moved into a partnership under Schedule 15 paragraph 10.
- List who owned the property immediately before the transfer.
- List the partners and their shares immediately after it.
- Calculate the lower proportions under paragraph 12 without the company.
- Identify any company connected with an original owner.
- Ask whether it would be a corresponding partner if it were allowed to count.
- Check the statutory same-group test.
- Calculate the tax again on that basis.
- Test the modified group relief restrictions before claiming.
What matters most? The documents showing ownership and control. A diagram can help, but it must match the legal rights at the relevant time.
Example
Imagine that a partnership receives property worth £1 million. Here, the normal partnership calculation produces SDLT of £40,000. A company connected with an original owner did not count only because it was a company, but it was in the same group as that owner.
If, for the transfer, treating that company as a corresponding partner would produce SDLT of £10,000, paragraph 27A reduces the charge to that same £10,000 amount. That is the reduced charge. The partnership must still meet the modified group relief conditions and make the claim in its return.
Why this can be difficult in practice
People often assume that a company counts because it sits somewhere in the same business. That is not enough. A detailed group test and a separate connected-person test are used by the legislation.
There is another trap: group relief has restrictions. Relief can be blocked, for example, where arrangements involve outside funding, a planned loss of group status, or tax avoidance, even though the group relationship otherwise appears to be in place. Those restrictions need checking. Paragraph 27A also changes parts of the normal group relief rules for these partnership cases.
- A company may be connected without being in the same group.
- A company may be in the group but not meet the corresponding-partner test.
- Before and after the transfer, the group position can differ.
- Plans agreed before completion can matter, even if they happen later.
- Using HMRC’s code does not itself prove entitlement to relief.
- Detailed partnership and company records may determine the legal result.
Key takeaways
- This SDLT relief can reduce, rather than remove, the tax charge.
- Both the connected company and original owner must be in the same statutory group.
- The partnership must calculate carefully and claim the relief in its return.
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 10 — tax calculation for property transferred into a partnership
- FA 2003 Schedule 15 para 12 — calculating retained interests when property enters a partnership
- FA 2003 Schedule 15 para 27 — modified group relief rules for partnership transactions
- FA 2003 Schedule 15 para 27A — group relief for connected companies in partnership calculations
- FA 2003 Schedule 7 para 1 — basic conditions for companies within the same group
- FA 2003 Schedule 7 para 2 — arrangements and tax avoidance restrictions on group relief
- FA 2003 section 76 — land transaction returns and self-assessment of stamp duty
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
- Whether a company is connected with the original owner can require detailed analysis of the ownership and control facts.
- Whether companies form the same group depends on the statutory 75% ownership tests, not simply on common branding or management.
- The supplied legislation is current only to 17 November 2025. A transaction after that date needs a check 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 partnership agreement and details of each partner’s share
- documents showing who owned the property before the transfer
- group structure charts and share ownership records
- records of rights to profits and assets on a winding-up
- details of any planned sale, funding or change of control
- the completed land transaction return and 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 SDLT group relief when a company is linked to 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 10 - tax calculation for property transferred into a partnership https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/10/2025-11-17 - FA 2003 Schedule 15 para 12 - calculating retained interests when property enters a partnership https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/12/2025-11-17 - FA 2003 Schedule 15 para 27 - modified group relief rules for partnership transactions https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/27/2025-11-17 - FA 2003 Schedule 15 para 27A - group relief for connected companies in partnership calculations https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/27A/2025-11-17 - FA 2003 Schedule 7 para 1 - basic conditions for companies within the same group https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/1/2025-11-17 - FA 2003 Schedule 7 para 2 - arrangements and tax avoidance restrictions on group relief https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/2/2025-11-17 - FA 2003 section 76 - land transaction returns and self-assessment of stamp duty https://www.legislation.gov.uk/ukpga/2003/14/section/76/2025-11-17 Guidance page from HMRC on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm34490 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 - Whether a company is connected with the original owner can require detailed analysis of the ownership and control facts. - Whether companies form the same group depends on the statutory 75% ownership tests, not simply on common branding or management. - The supplied legislation is current only to 17 November 2025. A transaction after that date needs a check 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 a company is linked to a partnership
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