Is shared ownership staircasing linked for SDLT if the original lease was granted after 12 March 2008?

Introduction

Shared ownership SDLT can be confusing, especially when a buyer purchases an existing shared ownership lease and later staircases to 100%. A common question is whether the final staircasing payment is treated as a separate transaction or whether it is linked back to the earlier purchase.

The answer depends heavily on the date the original shared ownership lease was first granted and whether a market value election was made. In the scenario considered here, the key point was that the original lease was granted in 2010. That brings the case within the post-12 March 2008 shared ownership rules.

The Question

A buyer acquired a 45% share in a shared ownership house in 2022 for £109,125. The full market value at that time was £242,500. No SDLT was paid on that purchase.

The buyer now plans to staircase to 100% ownership and acquire the freehold. The current market value is £250,000, so the price for the remaining 55% is assumed to be £137,500.

The lease was not originally granted to the current buyer. It was originally granted in 2010, then assigned to later owners, and eventually assigned to the current buyer in 2022. The issue is whether the final staircasing transaction is linked to the 2022 purchase for SDLT purposes, and if so, how SDLT should be calculated.

Nick’s Explanation

Nick’s corrected view was that the date of the original lease makes a real difference. Because the original shared ownership lease was granted in 2010, the post-12 March 2008 rules apply.

In his words, once that date was corrected, “each staircasing transaction is treated as linked with the original grant for SDLT purposes” where no market value election was made at the outset.

He explained that this means the amount paid for the earlier 45% share and the amount paid for the final 55% share are aggregated to work out the SDLT position. On the figures provided:

• Original 45% share: £109,125
• Final 55% share: £137,500
• Total linked consideration: £246,625

Nick concluded that, on those figures, the SDLT due if this is the buyer’s only residential property remains £250.

The Law

The starting point is Part 4 of the Finance Act 2003.

• Section 42 introduces SDLT as a tax on land transactions.
• Section 43 defines a land transaction.
• Section 48 defines a chargeable interest.
• Section 49 confirms that the acquisition of a chargeable interest is a chargeable transaction unless exempt.
• Section 50 and Schedule 4 deal with chargeable consideration.
• Section 80 deals with further returns and further tax becoming payable in some cases.
• Section 108 contains the general linked transactions rule.

For shared ownership, the special rules are in Schedule 9 to the Finance Act 2003.

Broadly, where a shared ownership lease was originally granted on or after 12 March 2008 and no market value election was made, later staircasing payments are brought into the SDLT regime under the post-2008 shared ownership rules. In practical terms, staircasing is treated as linked with the original grant for SDLT purposes.

That is different from the treatment of some older shared ownership leases granted before 12 March 2008, where different rules can apply.

Analysis

The analysis can be worked through in stages.

1. Identify the date of the original shared ownership lease.

   Here, the original lease was granted in 2010. That is after 12 March 2008, so the post-2008 shared ownership rules apply.

2. Ask whether a market value election was made.

   On the facts given, no market value election was made. That matters because if a market value election had been made at the outset, SDLT would usually already have been dealt with on the full market value, and later staircasing would generally not trigger further SDLT in the same way.

3. Determine whether the staircasing is linked.

   Because this is a post-12 March 2008 shared ownership lease with no market value election, the final staircasing is treated as linked with the earlier acquisition for SDLT purposes.

4. Aggregate the relevant consideration.

   The earlier payment of £109,125 and the final payment of £137,500 are added together:

   £109,125 + £137,500 = £246,625

5. Apply the SDLT residential rates to the linked total.

   Using the figures given in the original explanation, the linked total remains below £250,000. On that basis:

   • £0 on the first £125,000
   • 2% on the amount above £125,000 up to £246,625

   That gives SDLT of £250 on the figures used in Nick’s explanation.

6. Consider the higher rates if the buyer owns another dwelling.

   If the buyer owns another residential property and the higher rates apply, the additional dwelling supplement may increase the SDLT payable. Nick’s explanation treated the 5% higher rates as applying to the £137,500 staircasing amount in addition to the standard calculation, producing a total of £7,125 on the stated assumptions.

The fact that the lease was assigned to the buyer, rather than originally granted to that buyer, does not by itself prevent the post-2008 shared ownership rules from applying. The crucial point is the date of the original lease and the structure of the shared ownership arrangement.

The earlier SDLT return saying the 2022 transaction was not linked does not settle the later staircasing question. The later staircasing event has to be tested under the shared ownership rules as they apply when the buyer acquires the additional share.

The later suggestion about possible mixed-use treatment does not appear to fit the facts as stated. Shared ownership staircasing of an ordinary house will usually be analysed under the residential rules unless there is a genuine non-residential element. Any mixed-use argument would need very careful factual support.

Likewise, if anyone is considering arguing that a dwelling was uninhabitable or not suitable for use as a dwelling, the threshold is now relatively high following Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799.

Outcome

On the corrected facts, the final staircasing is linked for SDLT purposes because the original shared ownership lease was granted in 2010, which is after 12 March 2008, and no market value election was made.

That means the earlier payment for the 45% share and the later payment for the 55% share are aggregated. Using the figures provided, the linked consideration is £246,625 and the SDLT due, on the assumptions stated, is £250 if this is the buyer’s only residential property.

Practical Steps

1. Check the date the original shared ownership lease was first granted, not just the date the current buyer acquired it.
2. Confirm whether a market value election was made on the original shared ownership transaction.
3. Obtain the exact premium payable for the final staircasing and any freehold transfer.
4. Review the earlier SDLT return and supporting paperwork, but do not assume the earlier “linked transaction” answer resolves the staircasing issue.
5. Calculate the total linked consideration by adding the earlier premium and the staircasing premium.
6. Check whether the buyer owns any other residential property, because that may affect the higher rates position.
7. Ensure any further SDLT return required under section 80 Finance Act 2003 is filed correctly and on time.

Conclusion

For a shared ownership lease originally granted after 12 March 2008, later staircasing is usually linked for SDLT purposes if no market value election was made. In the example considered here, that means the 2022 purchase and the final staircasing payment are aggregated, producing SDLT of £250 on the figures given for a buyer who owns no other dwelling.

Legal References Used

• Finance Act 2003, Part 4
• Finance Act 2003, section 42
• Finance Act 2003, section 43
• Finance Act 2003, section 48
• Finance Act 2003, section 49
• Finance Act 2003, section 50
• Finance Act 2003, section 80
• Finance Act 2003, section 108
• Finance Act 2003, Schedule 4
• Finance Act 2003, Schedule 9
• Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799

This page was last updated on 22 March 2026.

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