Can first-time buyers’ relief apply if a connected company buys adjoining farm land and buildings at the same time?

Introduction

Buyers often ask whether Stamp Duty Land Tax (SDLT) can be reduced where one purchase is a home and another connected purchase is non-residential land or buildings. The issue becomes more difficult where the residential property is bought personally, but the non-residential property is bought by a company connected with the buyers. In that situation, the key questions are whether the transactions are “linked” for SDLT purposes and, if they are, whether the combined purchase is treated as mixed-use.

Those points matter because First-Time Buyers’ Relief (FTBR) is only available where the relevant land consists entirely of residential property. If a linked transaction includes any non-residential element, FTBR may be lost.

The Question

The scenario involves two purchases from the same seller, taking place at broadly the same time:

• an individual purchase of a dwelling for £187,500, funded with a residential mortgage; and
• a connected company purchase of farm land and buildings for £360,000, funded with a commercial mortgage.

The individual buyers are connected with the company, for example as directors or shareholders. The practical question is whether the dwelling purchase can still benefit from FTBR, or whether HMRC would treat the two acquisitions as linked so that the combined transaction becomes mixed-use and is taxed at non-residential rates.

Nick’s Explanation

Nick’s view was that FTBR is not available if HMRC treats the two acquisitions as linked transactions under the Finance Act 2003.

In summary, his reasoning was:

• under section 108 of the Finance Act 2003, transactions can be linked where they form part of a single scheme, arrangement or series of transactions between the same vendor and purchaser, or persons connected with them;
• because the individual buyers are connected with the company, both purchases are from the same seller, and they are happening at broadly the same time, HMRC would have a basis for arguing that the transactions are linked;
• if linked, and one part of the arrangement is non-residential, the overall SDLT treatment becomes mixed-use;
• Schedule 6ZA requires the relevant land for FTBR to consist entirely of residential property, so mixed-use treatment prevents FTBR from applying.

Nick also noted the practical split in outcomes:

• if the transactions are accepted as separate, the dwelling purchase may qualify for FTBR and the non-residential purchase would produce SDLT of £7,500 at standard non-residential rates;
• if the transactions are linked, SDLT would be calculated on the combined consideration of £547,500 at mixed-use rates, giving SDLT of £16,875.

He further observed that evidence such as separate marketing, separate finance, and genuinely independent negotiations may help support an argument that the purchases were not part of one overall arrangement, although that does not guarantee HMRC acceptance.

The Law

The main provisions are in the Finance Act 2003.

Section 108 deals with linked transactions. Broadly, transactions are linked if they form part of a single scheme, arrangement or series of transactions between the same vendor and purchaser, or persons connected with them. SDLT on linked transactions is calculated by reference to the total consideration for all linked transactions.

Section 116 defines residential and non-residential property. Residential property includes a building used or suitable for use as a dwelling, together with garden or grounds. Non-residential property is property that is not residential property.

Schedule 6ZA governs First-Time Buyers’ Relief. One of the core conditions is that the relevant land must consist entirely of residential property. If the transaction, or a linked set of transactions, includes non-residential property, that condition is not met.

Where suitability for use as a dwelling is in issue, the threshold is now relatively high following Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799. In an uninhabitable or not suitable for use argument, a buyer now needs strong facts to show that the property truly was not suitable for use as a dwelling at the effective date of transaction. That point is relevant in some mixed-use or non-residential SDLT disputes, although in the present scenario the main issue is linkage rather than habitability.

Analysis

The analysis usually has four stages.

First, identify whether there are two separate land transactions as a matter of contract and conveyancing. Here, there is a personal purchase of a dwelling and a company purchase of farm land and buildings. On paper, those are separate acquisitions.

Second, ask whether they are linked under section 108. HMRC would look at the surrounding facts, not just the contract titles. Relevant features include:

• the same seller;
• timing close together;
• commercial interdependence between the deals;
• whether one purchase would have happened without the other;
• whether the parties are connected;
• whether there was a wider plan to divide up one overall property package.

Where individuals buy the dwelling and their connected company buys the adjoining or related non-residential property from the same seller at around the same time, HMRC may argue that the transactions are part of one arrangement.

Third, if the transactions are linked, consider the character of the combined acquisition. If one linked transaction includes non-residential land or buildings, the linked set is treated as mixed-use for SDLT rate purposes. That means the non-residential rate table applies to the total linked consideration.

Fourth, test FTBR. Schedule 6ZA only applies where the relevant land consists entirely of residential property. Once the linked purchase includes non-residential property, that condition fails. So even if the dwelling on its own would otherwise qualify, FTBR is lost if the purchases are linked and mixed-use treatment applies.

On the figures given:

• the non-residential purchase alone at £360,000 would produce SDLT of £7,500 using standard non-residential rates;
• if the dwelling purchase stands alone and all FTBR conditions are met, no SDLT would arise on the £187,500 dwelling purchase;
• if the transactions are linked, the combined consideration is £547,500, and SDLT at mixed-use rates is £16,875.

The existence of separate estate agent listings and different mortgage products may help show separation, but they are not conclusive. HMRC would still ask whether, in substance, the buyers and the connected company were carrying out one coordinated acquisition from one seller.

Outcome

The practical answer is that FTBR is at real risk of being unavailable if the personal dwelling purchase and the connected company’s farm purchase are part of the same overall arrangement. If HMRC treats the transactions as linked, the combined acquisition is likely to be taxed as mixed-use, and FTBR will not apply.

If, however, the buyers can show that the two purchases were genuinely independent transactions, separately negotiated and not forming part of a single scheme or arrangement, there is a basis for arguing that FTBR can still apply to the dwelling purchase while the company pays SDLT on the non-residential purchase separately.

Practical Steps

Anyone in this position should work through the following points carefully:

• review the contracts and heads of terms to see whether one transaction is conditional on the other;
• check whether negotiations were separate or whether the seller treated the assets as one overall package;
• gather evidence of separate marketing, separate viewings, separate offers and separate decision-making;
• keep evidence of distinct funding, such as separate mortgage offers and separate affordability or lending assessments;
• consider the ownership and control position of the company, because connected-party status is highly relevant to section 108;
• ask the conveyancer to analyse whether the SDLT return should be filed on a linked or separate basis, with supporting evidence retained in case of HMRC enquiry;
• where any argument depends on a property not being suitable for use as a dwelling, assess that point against the stricter approach confirmed in Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799.

Conclusion

A dwelling bought by first-time buyers does not automatically keep FTBR just because the non-residential element is bought by a separate company. If the buyers are connected with that company and both purchases form part of one arrangement with the same seller, HMRC may treat them as linked. In that event, mixed-use rates apply to the combined price and FTBR is lost.

Legal References Used

• Finance Act 2003, section 108
• Finance Act 2003, section 116
• Finance Act 2003, Schedule 6ZA
• 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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