Stamp duty land tax ― corporate transactions

Application of basic rules

Where a company acquires the subject matter of a land transaction, it will generally be subject to stamp duty land tax (SDLT) in the same way as other purchasers under FA 2003, s 43, with chargeable consideration being determined by normal SDLT principles including those set out in FA 2003, Sch 4. See the Stamp duty land tax ― basic rules guidance note for further details on the charge to SDLT.

Connected companies

Where the company is connected with the person from whom it acquires its interest in land (whether the vendor is an individual or a company), the consideration is deemed to be no less than the market value of the subject matter.

The definition of a connected person for this purpose is provided by CTA 2010, s 1122.

The rule also has effect where a vendor transfers property to a company and some or all of the consideration for that transfer consists of the issue or transfer of shares in a company with which the vendor is connected.

See Example 1.

Certain exclusions from the deemed market value rule are provided by FA 2003, s 54 and other reliefs and exemptions may apply depending on the specific circumstances. In particular, where the transaction is, or is part of, a distribution of assets of the vendor (whether on liquidation or otherwise such as a dividend in specie) the deemed market value rule may not apply. Care is required here as this exclusion does not apply where the subject matter of the transaction had been the subject of a group relief claim within the previous three years.

Group relief

Group relief is available under FA 2003, Sch 7, para 1 where the vendor (V) and the purchaser (P) are both companies that are members of the same group. A transaction is exempt from charge to SDLT provided certain conditions are satisfied. For these purposes, a 75% parent / subsidiary relationship is required, or both companies must be