Guidance on Completing SDLT1 Forms for Linked Property Transactions

Linked transactions and SDLT on form SDLT1

When completing question 13 of the SDLT1 return, linked transactions can affect how SDLT is calculated. If separate land deals are part of one overall arrangement, or involve connected people, HMRC may require you to add the non-rent consideration for all linked transactions together to set the SDLT rate, even though each buyer still submits their own return and pays tax on their own purchase.

• Transactions may be linked if they are part of a single bargain or are connected in substance, rather than being genuinely separate deals.
• Connected persons can include spouses, siblings, ancestors, lineal descendants, a person and a company they control, and two companies under common control.
• Where transactions are linked, you usually total all consideration excluding rent and use that combined figure to determine the SDLT rate band.
• The combined figure sets the rate, but each return still relates to that buyer’s own transaction rather than charging them on the full combined price.
• Lease transactions involving rent may need different treatment, so special care is needed in “code L” cases.
• Each SDLT1 return for linked transactions should show the position consistently, and late filing penalties can apply separately to each return.

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How linked transactions affect SDLT on form SDLT1

This page explains what HMRC means by “linked transactions” when completing question 13 of the SDLT1 return. The point matters because SDLT is not always worked out by looking at each purchase in isolation. If transactions are linked, you may need to total the consideration across all of them before deciding the rate of tax.

What this rule is about

SDLT can apply to more than one land transaction that is connected in substance. The official material here is dealing with cases where separate purchases are part of the same overall arrangement, or involve connected people, so that they must be treated as linked.

The practical effect is that the tax rate may be set by reference to the combined price of all the linked transactions, rather than the price paid under a single contract alone. This can increase the SDLT due on a transaction that, viewed on its own, would fall into a lower rate band.

What the official source says

The source gives examples of connected persons for this purpose. It says:

• a husband and wife are connected;
• a person is connected with a brother or sister, an ancestor, or a lineal descendant;
• a person is connected with a company they control; and
• two companies are connected if the same person controls both of them.

It then states that if transactions are linked, you aggregate the whole consideration payable for all the transactions, other than rent, and apply the appropriate rate of tax to that total. The source notes separately that there are special “code L” cases where the consideration includes rent.

The example given is:

• Jack buys a house for £240,000.
• His wife Jill buys the garden for £20,000.
• Both purchases are from the same seller and are part of a single bargain.

Because the transactions are linked, each return shows the aggregate consideration of £260,000 in question 13 part 2. Jack’s SDLT is calculated using the rate applicable to £260,000, producing tax of £7,200 on his £240,000 purchase. Jill’s SDLT is £600 on her £20,000 purchase. The example also shows a £100 fixed late filing penalty on each return because both returns were submitted two months after the filing date.

What this means in practice

The key point is that linking affects the rate-setting exercise. You first identify all the linked transactions, then add together the non-rent consideration across them, and then work out the SDLT by applying the rate that corresponds to that combined figure.

That does not mean the buyer of one property automatically pays SDLT on the other buyer’s price as well. Rather, the aggregate figure is used to determine the rate band, and that rate is then applied to the consideration chargeable on the particular return, subject to the SDLT rules in force for the type of transaction.

In the example, Jill is only paying £20,000 for the garden. But because her purchase is linked with Jack’s £240,000 purchase, her transaction is taxed by reference to the rate that applies to the combined total of £260,000. Without the linking rule, her own purchase might have fallen into a lower band or produced less tax.

Question 13 on SDLT1 is therefore not a minor administrative question. Ticking “yes” can change the SDLT calculation materially.

How to analyse it

A sensible way to approach question 13 is:

• Identify all transactions involving the same buyer or connected buyers, and the same seller or connected sellers, that may form part of one arrangement.
• Ask whether the transactions are part of a single bargain or otherwise linked in substance, rather than being wholly separate dealings.
• Check whether the parties are connected. The source gives family and company-control examples, but the wider legal rules on connected persons are found in legislation.
• Add together the consideration for all linked transactions, excluding rent, unless you are dealing with a case where the return requires separate treatment of rent.
• Use that aggregate amount to determine the SDLT rate.
• Complete each SDLT1 return consistently, including question 13 and the aggregate figure in question 13 part 2.

For conveyancing and compliance purposes, the practical questions are usually:

• Are these transactions really independent, or are they components of one overall deal?
• Are any of the buyers or sellers connected persons?
• Has land been split between family members or related companies in a way that still forms one bargain?
• If there are multiple returns, are they all using the same aggregate linked consideration figure?

Example

Illustration: A parent and adult child buy adjoining pieces of land from the same seller on the same day. One buys the house and the other buys a strip of land needed for access. If, on the facts, the purchases are part of one overall bargain, the transactions may be linked. In that case, the SDLT rate is determined by the combined consideration across both purchases, not by looking at each purchase separately.

The source’s own example works in exactly this way with spouses buying a house and garden separately from the same seller.

Why this can be difficult in practice

The difficult part is often not the arithmetic but deciding whether transactions are truly linked. The source example is straightforward because the buyers are connected and the purchases are expressly “part of a single bargain”. Real cases are often less clear.

For example, transactions may be close in time but still be separate. Equally, they may be under different contracts and in different names, but still be linked if they are really components of one arrangement.

Another practical difficulty is that connected persons do not automatically make every transaction linked in every circumstance. Connection is an important indicator, and in some contexts a statutory test, but the facts still matter. The source page is focused on completing the return, not on setting out the full legal test in detail.

The treatment of rent can also complicate matters. This page says to aggregate all consideration other than rent, and notes that there are separate “code L” cases where rent is involved. So lease transactions involving rent should be checked carefully against the specific SDLT rules for rent rather than assuming this page gives the whole answer.

Finally, if returns are filed late, penalties can apply separately to each return, as the example shows.

Key takeaways

• If transactions are linked, SDLT is not worked out by looking at each purchase on its own.
• For question 13 SDLT1, you generally aggregate all non-rent consideration for the linked transactions and use that total to determine the rate.
• Connected persons and a single overall bargain are strong indicators that transactions should be treated as linked.

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 Forms for Linked Property Transactions

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