Q&As

A development company has sold 21 units on a development by granting long leases and is to retain six further units on the development. The development company will transfer the six units to a connected company for a nominal amount and then transfer the freehold of all units to a management company that is also connected to it. Is stamp duty land tax charged on the market value of the units and will the transactions be linked transactions?

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Published on LexisPSL on 17/10/2018

The following Tax Q&A provides comprehensive and up to date legal information covering:

  • A development company has sold 21 units on a development by granting long leases and is to retain six further units on the development. The development company will transfer the six units to a connected company for a nominal amount and then transfer the freehold of all units to a management company that is also connected to it. Is stamp duty land tax charged on the market value of the units and will the transactions be linked transactions?

When a company acquires property from a connected person, stamp duty land tax (SDLT) is generally charged by reference to the market value of the property acquired (rather than the chargeable consideration) unless an exception or a relief applies.

Where there is:

  1. a land transaction between a vendor and a purchaser which is a company

  2. the vendor and purchaser are connected (connected for these purposes is set out in section 1122 of the Corporation Tax Act 2010 (CTA 2010)), or

  3. all or part of the consideration for the land transacti

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