Guide to Group Relief and Partnerships with Examples and Applications

SDLT Group Relief: Partnerships, LLPs and Paragraph 27

Paragraph 27 can limit or block SDLT group relief where a land transfer within a corporate group involves a partnership or LLP. The key point is that, even if a transfer looks like a normal intra-group transaction, HMRC expects further analysis where economic ownership may sit partly outside the group through partnership interests.

• Paragraph 27 is not a separate relief; it is a rule that qualifies ordinary SDLT group relief.
• Different treatment may apply for English partnerships, Scottish partnerships, limited partnerships and LLPs.
• Relief may be available in full, only partly, or not at all depending on ownership proportions and who is outside the group.
• Paragraph 27A and the “sum of the lower proportions” rule may also need to be considered as part of the same analysis.
• A company-to-company land transfer can still require partnership review if a group company is or was a partner, or if the land is linked to partnership arrangements.
• HMRC’s manual gives structure and examples, but the legal answer depends on the legislation and the exact facts.

Scroll down for the full analysis.

SDLT group relief: how paragraph 27 affects partnerships and LLPs

This page explains a technical part of SDLT group relief that matters when land is transferred within a corporate group and a partnership or LLP is involved. The official material listed here is a contents page for HMRC’s detailed guidance on paragraph 27 and related rules. Although the extract itself does not set out the rule in full, it shows that special treatment applies where the transaction involves English partnerships, Scottish partnerships, limited partnerships, and limited liability partnerships, and that paragraph 27A and the “sum of the lower proportions” rule are closely connected.

What this rule is about

Group relief can reduce or eliminate SDLT on certain transfers of land between companies in the same group. But the legislation contains anti-avoidance and boundary rules to deal with cases where the land is connected, directly or indirectly, with a partnership or LLP structure.

The reason is straightforward. A group transfer between companies may look like an intra-group movement of property, but if partnership interests are involved, the economic ownership of the land may not be confined to the group in the same way. Paragraph 27 is part of the mechanism that tests whether group relief should be restricted or denied in those cases.

The contents list also shows that the rules are not identical across all types of entity. HMRC separates its discussion into:

• English partnerships and English limited partnerships
• Scottish partnerships and Scottish limited partnerships
• Limited liability partnerships

That split matters because the legal nature of those entities differs, and SDLT analysis often depends on who is treated as holding the property and who is treated as making the transfer.

What the official source says

The supplied source is a navigation page from HMRC’s SDLT manual. It identifies the following areas of guidance:

• Application of group relief under paragraph 27
• Application of paragraph 27A, including an example
• Separate treatment for English partnerships and English limited partnerships, with examples
• Separate treatment for Scottish partnerships and Scottish limited partnerships, with examples
• Separate treatment for limited liability partnerships, with examples
• A section linking group relief with the “sum of the lower proportions” rule under paragraphs 12 and 27A

Even from this limited source, two points are clear.

First, HMRC treats paragraph 27 as a specific qualification on ordinary group relief, not as a free-standing relief in its own right.

Second, the interaction with partnership rules is important enough to require separate guidance and examples for different legal forms of partnership and LLP.

What this means in practice

If you are considering claiming group relief on a land transfer within a corporate group, you should not stop at the basic group relief conditions. You also need to ask whether the property, the transferor, the transferee, or a connected arrangement involves a partnership or LLP.

In practice, this means:

• a simple company-to-company transfer may still need partnership analysis if one of the companies is or was a partner in a property-owning partnership
• the result may depend on whether the entity is an English partnership, a Scottish partnership, a limited partnership, or an LLP
• the extent of group ownership, and the extent of non-group participation, may affect whether relief is available in full, only in part, or not at all
• you may need to consider paragraph 27A and the “sum of the lower proportions” calculation as part of the same exercise

For conveyancers and tax teams, this is a warning sign. A transaction that appears routine at company level may require a much deeper review of the ownership chain and the legal character of the entities involved.

How to analyse it

A sensible way to approach the issue is to work through the following questions.

1. Is group relief being claimed at all?

   Paragraph 27 only matters if the transaction is one where intra-group relief is in point.

2. Is any partnership or LLP involved in the facts?

   Look beyond the immediate transfer. Check whether the land is held through a partnership, whether a group company is or was a partner, and whether the transaction is linked to changes in partnership interests.

3. What type of entity is involved?

   The HMRC manual separates English partnerships, Scottish partnerships, limited partnerships, and LLPs. That suggests the legal analysis may differ depending on the entity type.

4. Does paragraph 27A also need to be considered?

   The contents page links paragraph 27A closely with paragraph 27 and provides a separate example. That usually indicates that paragraph 27A modifies or supplements the basic rule in some cases.

5. Is the “sum of the lower proportions” rule relevant?

   The source specifically links group relief with paragraphs 12 and 27A. If the transaction involves partnership interests, this calculation may be part of working out how much of the chargeable interest is effectively outside the group.

6. Do the facts support full relief, partial relief, or no relief?

   The existence of multiple examples in the manual suggests outcomes can vary significantly depending on the ownership proportions and entity structure.

Example

This is a simple illustration of the kind of issue paragraph 27 is aimed at.

Company A and Company B are in the same SDLT group. A property is connected with a partnership arrangement in which one or more group companies participate alongside persons outside the group. Company A transfers land to Company B and claims group relief.

At first glance, this looks like a straightforward intra-group transfer. But if the economic interest in the land is partly reflected through partnership shares, the transfer may need to be tested under paragraph 27 and possibly paragraph 27A. The availability of relief may then depend on the type of partnership or LLP and on the relevant ownership proportions.

The practical lesson is that the company structure alone does not settle the SDLT result.

Why this can be difficult in practice

These rules are difficult because they sit at the junction of two technical regimes: group relief and partnership SDLT rules.

Several things can make the analysis harder:

• different legal treatment of English, Scottish, and limited partnerships
• the distinct status of LLPs
• the need to trace indirect economic interests rather than looking only at legal title
• the interaction between paragraph 27, paragraph 27A, and the “sum of the lower proportions” rule
• the possibility that a small factual difference changes the result

The source material itself signals this complexity by splitting the guidance into multiple sections and examples. That is usually a sign that the answer depends heavily on the exact facts and legal form of the arrangement.

Another practical difficulty is that HMRC manual guidance is not the legislation. The manual shows HMRC’s view of how the rules operate, but the legal answer ultimately depends on the statutory provisions and, where relevant, case law on the nature of the entity and the transaction.

Key takeaways

• Paragraph 27 is a special rule affecting SDLT group relief where partnerships or LLPs are involved.
• The analysis may differ depending on whether the arrangement involves an English partnership, Scottish partnership, limited partnership, or LLP.
• You may also need to consider paragraph 27A and the “sum of the lower proportions” rule before deciding whether group relief is available.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Guide to Group Relief and Partnerships with Examples and Applications

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