Do you pay SDLT when transferring a property from your company to yourself to live in?

Introduction

People often ask whether Stamp Duty Land Tax (SDLT) can be avoided when a property is moved from a company into the personal names of the company’s owners, especially where no money is being paid and the owners want to live in the property as their home.

The short answer is usually yes, SDLT can still apply. Where a company transfers a dwelling to connected individuals, the tax rules can treat the transfer by reference to market value rather than the amount originally paid or the amount now changing hands. If the individuals still own another home at the time of the transfer, the higher rates for additional dwellings may also apply, although a refund may later be available if the former main residence is sold in time.

The Question

A married couple jointly own a company that bought a residential property at auction. The property is now held by the company, was bought without borrowing, and has no mortgage. The couple no longer want to use it as a development or rental project. Instead, they want the company to transfer the property into their personal joint names so they can renovate it and use it as their new main home.

They still own and live in another home, which they intend to sell later. An independent valuation places the current market value of the company-owned property at £400,000, even though the company originally paid a higher amount at auction.

The issue is whether SDLT is payable on the transfer from the company to the couple personally, and if so, how much.

Nick’s Explanation

Nick’s view was that SDLT would apply on the transfer even if no cash is paid by the couple to the company on completion.

In summary, his reasoning was:

• because the transfer is between a company and its owners, the parties are connected, so the transaction is not treated as an arm’s length transfer;
• the SDLT charge is therefore based on the property’s market value at the time of transfer, not the historic auction price;
• because the couple still own their existing home when the transfer takes place, the higher rates for additional dwellings apply at that point;
• if they later dispose of their former main residence within the statutory time limit, they should be able to reclaim the higher rates element.

Using the stated market value of £400,000, Nick calculated SDLT of £30,000 at completion, made up of the standard residential rates plus the 5% higher rates surcharge. He also explained that the £20,000 higher rates element could potentially be reclaimed if the former main residence is disposed of within 3 years and the refund claim is made in time.

The Law

SDLT is charged under the Finance Act 2003 on land transactions involving chargeable consideration. For connected party transactions, special valuation rules can apply.

Where a company transfers property to connected individuals, market value rules are relevant. The connected persons test is applied by reference to section 1122 of the Corporation Tax Act 2010. In a case where individuals own and control the company, they will generally be connected with it for these purposes.

The higher rates for additional dwellings are contained in Schedule 4ZA to the Finance Act 2003. Broadly, where an individual buys a dwelling and, at the end of the effective date, still owns another major interest in another dwelling, the higher rates may apply unless the transaction qualifies as a replacement of only or main residence at that time.

If the buyer has not yet sold the former main residence by the time the new dwelling is acquired, the higher rates can still apply initially. However, Schedule 4ZA also provides for a refund if the former main residence is disposed of within the permitted period and the other conditions are met.

Analysis

The position can be worked through in stages.

First, this is a transfer of a dwelling from a company to the individuals who own that company. That means the parties are connected. In connected party cases, SDLT is not simply tested by asking whether money is being paid now. The tax analysis instead looks to the market value rule. On the facts given, the relevant value is £400,000, being the current valuation, not the earlier auction purchase price.

Second, the fact that the property is intended to become the couple’s new home does not by itself prevent the higher rates from applying. What matters is the position at the effective date of the transfer. If, on that date, they still own their existing home and have not yet disposed of it, they are treated as acquiring an additional dwelling. That brings Schedule 4ZA into play.

Third, the SDLT calculation on a market value of £400,000, using the rates set out in the source explanation, is:

• 0% standard rate plus 5% higher rates on the first £125,000 = £6,250
• 2% standard rate plus 5% higher rates on the next £125,000 = £8,750
• 5% standard rate plus 5% higher rates on the final £150,000 = £15,000

Total SDLT: £30,000.

Fourth, if the former main residence is later sold or otherwise disposed of within 3 years of the transfer, the higher rates may be reclaimed, provided the statutory conditions are met and the claim is submitted within the required deadline. On these figures, the reclaimable amount would be the 5% surcharge on £400,000, which is £20,000.

Finally, the fact that there is no mortgage does not remove the SDLT issue. No outstanding loan may simplify the transfer mechanics, but it does not displace the connected party and higher rates rules.

Outcome

On these facts, a transfer of the property from the company into the couple’s personal joint names would be expected to trigger SDLT based on the property’s market value of £400,000.

The SDLT due at the time of transfer would be £30,000 if the higher rates for additional dwellings apply, which they are likely to do while the couple still own their existing home.

If they then dispose of their former main residence within 3 years and make a valid refund claim in time, they should be able to recover the £20,000 higher rates element.

Practical Steps

If you are considering a similar transfer, the sensible steps are:

• obtain a proper open market valuation of the property as at the proposed transfer date;
• confirm the company ownership structure and whether the transfer is between connected persons;
• check whether you will still own another dwelling at the end of the effective date;
• calculate SDLT on the market value, not just on any cash changing hands;
• consider the timing of any sale of your existing home, because that affects whether the higher rates are payable upfront and whether a refund can later be claimed;
• ensure the transfer is documented correctly by a solicitor or conveyancer;
• keep evidence of occupation and disposal of the former main residence in case HMRC later asks for support for a refund claim.

Where a property is said to be uninhabitable or not suitable for use as a dwelling, that argument should be approached with caution. The threshold is now relatively high following Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799. A property will not fall outside the dwelling rules merely because it needs renovation or modernisation.

Conclusion

Transferring a home from your company to yourself is not SDLT-free simply because no money changes hands. If you are connected to the company, SDLT is likely to be charged on market value, and if you still own your current home at the time, the higher rates will usually apply first. A later sale of the old home may allow a refund of the surcharge, but not of the whole SDLT bill.

Legal References Used

• Finance Act 2003, Schedule 4, paragraph 1
• Finance Act 2003, Schedule 4ZA, including paragraph 3(1)
• Corporation Tax Act 2010, section 1122
• 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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