This guidance note concerns the tax treatment where two or more persons exchange interests in land (eg separating a joint buy-to-let portfolio). Land includes any interest or right over land and so covers freehold and leasehold interests in land or buildings.

Although this situation is most likely to apply on the breakdown of a marriage, it is possible that exchanges could be made between unmarried people, such as a cohabiting couple, siblings or friends.

Where a gain arises on the exchange for capital gains tax (CGT) purposes, there are rollover relief provisions that allow each person to defer the gain on the disposal of the old interest into the acquisition of the new interest, providing certain conditions are met.

Stamp taxes may be due on the exchange depending on the facts of the situation. See ‘Stamp taxes considerations on exchange of interests in property’ below.