SDLT and property investment partnerships
Produced in partnership with Kevin Griffin
SDLT and property investment partnerships

The following Tax guidance note Produced in partnership with Kevin Griffin provides comprehensive and up to date legal information covering:

  • SDLT and property investment partnerships
  • Which partnerships are regarded as PIPs?
  • The relevance of being a PIP
  • Types of transfers of interests in PIPs
  • The significance of Type A and Type B transfers
  • Paragraph 12A election
  • Exclusion of market rent leases
  • Calculation of SDLT on transfer of an interest in a PIP
  • Examples

This Practice Note sets out the specific stamp duty land tax (SDLT) rules which apply to property investment partnerships (PIPs). It explains the meaning of the term and the effect that PIP status has on the SDLT obligations of the partnership itself and the partners.

Broadly speaking, a partnership is a PIP if its principal activity is holding or exploiting chargeable interests.

The general effect of the provisions is to charge SDLT on the acquisition of an interest in a PIP as if an equivalent interest had been acquired in certain property owned by the PIP. Only some property is included in this, so each transaction must be examined in the light of the detailed rules.

Transfers of interests in partnerships which are not PIPs only give rise to SDLT charges in exceptional cases. However, the transfer of an interest in a PIP is regarded as a chargeable transaction, generally giving rise to SDLT if the PIP holds one or more relevant chargeable interests. Whether a chargeable interest held by the partnership is ‘relevant’ depends on both the specific type of transfer of partnership interest and the circumstances under which the partnership itself acquired the chargeable interest.

Like other partnerships, a PIP is entitled to pay less than a full, market value based SDLT charge on acquisition of a chargeable interest from a partner or