Guidance on Completing SDLT1 Form: Effective Date of Transaction Explained

SDLT effective date: completion date or an earlier date

For SDLT, the effective date is the date you enter at question 4 on the SDLT1 return. This is usually the completion date, but if the contract is substantially performed earlier, you must use that earlier date instead. Getting the date right matters because it affects when the return and any SDLT payment are due.

• Enter the date in question 4 in dd/mm/yyyy format, with a leading zero where needed, and do not use a future date.
• If the buyer, or a connected person, takes possession of all or substantially all of the property before completion, that earlier date may become the effective date.
• If a substantial amount of the price is paid before completion, the effective date may be brought forward; HMRC says 90% or more is substantial.
• For an agreement for lease, payment of the first rent before completion can make that payment date the effective date.
• Later completion may still create a further obligation to notify HMRC, so do not assume the SDLT position is dealt with only once.

Scroll down for the full analysis.

SDLT effective date: when to enter completion and when an earlier date applies

This page explains how to work out the “effective date of transaction” for question 4 on an SDLT1 return. This matters because SDLT reporting is tied to the effective date. In some cases, the effective date is not the completion date. If a contract is substantially performed earlier, that earlier date must be used instead.

What this rule is about

For SDLT, the effective date is a key date in the life of a land transaction. It is the date that determines when the transaction must be notified and, in many cases, when the tax position is measured.

The HMRC material here is focused on a practical filing point: what date should be entered in question 4 of the SDLT1 form. The main issue is that parties often think only about legal completion, but SDLT can be triggered earlier if the contract has already been substantially performed.

What the official source says

The official material says the date in question 4 must be entered in the format dd/mm/yyyy, including a leading zero for a single-digit day or month.

More importantly, it says a contract may be substantially performed before completion. If that happens, the earlier date of substantial performance is the effective date that must be entered.

The source identifies three situations in which substantial performance can occur:

• the purchaser, or a person connected with the purchaser, takes possession of the whole, or substantially the whole, of the subject matter of the contract
• a substantial amount of the consideration is paid
• for an agreement for lease, the first payment of rent is made

HMRC’s view, as stated in the manual, is that 90% or more counts as “substantial”.

The source also says that if substantial performance happens before completion, there may be a further obligation to notify HMRC when completion later occurs.

Finally, the form must not be post-dated. In other words, you should not enter a future date.

What this means in practice

If nothing happens before completion that amounts to substantial performance, the effective date will usually be the completion date.

But if the buyer is let into possession early, or pays a sufficiently large part of the price early, SDLT may be brought forward. The return should then use that earlier date, not the later completion date.

This can catch people out in transactions where:

• the buyer moves in before legal completion
• the buyer starts using most of the property before completion
• a very large deposit or other payment is made before completion
• there is an agreement for lease and rent starts before the lease is formally completed

The practical consequence is not just about filling in a box on the form. Using the wrong date can affect whether the return is filed on time and whether SDLT is paid on time.

How to analyse it

A sensible way to approach question 4 is to ask the following in order.

• What is the actual completion date?
• Before that date, did the purchaser, or someone connected with the purchaser, take possession of all or substantially all of the property?
• Before completion, was a substantial amount of the consideration paid?
• If this is an agreement for lease, was the first rent payment made before completion?
• If one of those events happened early, on what exact date did it happen?

If the answer to any of those middle questions is yes, that earlier date is the one that should normally be entered as the effective date.

Where the issue is payment, the HMRC manual gives HMRC’s view that 90% or more is substantial. That is helpful operationally, but it is still important to remember that a manual states HMRC’s approach, not the wording of the legislation itself.

Where the issue is possession, the facts matter. The question is not simply whether the buyer had access. It is whether the buyer, or a connected person, took possession of the whole or substantially the whole of what is being bought.

Example

Illustration: a buyer exchanges contracts to buy a commercial building. Legal completion is set for 30 September. On 1 September, the seller allows the buyer into occupation of almost all of the building so the buyer can begin trading from it. No formal completion has yet taken place.

On these facts, the contract may have been substantially performed on 1 September because the purchaser took possession of the whole, or substantially the whole, of the subject matter of the contract. If so, 1 September is the effective date to enter on the SDLT return, not 30 September.

If completion then takes place later, the source indicates there may also be a further notification obligation at that later stage.

Why this can be difficult in practice

The main difficulty is that “substantial performance” is highly fact-sensitive.

For possession, there may be uncertainty over whether the buyer really took possession, and whether what was occupied was the whole or substantially the whole of the property. Limited access for inspection, fitting-out, or preparatory works may need careful analysis, because not every form of access is necessarily possession.

For payment, the HMRC material gives a 90% benchmark for what HMRC regards as substantial. That is useful, but transactions are not always straightforward. It may not be obvious what counts as consideration at a particular stage, especially where the price is contingent, adjusted, or split between different elements.

There can also be practical confusion where parties think that SDLT only matters on formal completion. The source makes clear that this is not always right. An earlier event can trigger the effective date, and later completion may still create a further filing consequence.

Key takeaways

• The effective date for SDLT is not always the completion date.
• If the contract is substantially performed earlier, that earlier date must be entered on the SDLT1.
• Early possession, payment of a substantial part of the consideration, or first rent under an agreement for lease can bring the effective date forward.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Guidance on Completing SDLT1 Form: Effective Date of Transaction Explained

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