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HMRC internal manual

Stamp Duty Land Tax Manual

From
HM Revenue & Customs
Updated
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Scope: What is chargeable: Transfer of rights: General FA03/S45: examples

Assignment or sub-sale?

Assignment

A Ltd contracts with B Ltd to sell land to B Ltd for £100,000.

B Ltd pays a deposit to A Ltd of £10,000.

B Ltd then assigns the benefit of his contract with A Ltd to C Ltd for £20,000.

The obligation to pay A Ltd the outstanding amount of £90,000 has now been assumed by C Ltd.

On completion, A Ltd transfers the land directly to C Ltd and C Ltd pays £90,000. B Ltd has made a profit of £10,000.

Sub-sale

A Ltd contracts with B Ltd to sell land to B Ltd for £100,000.

B Ltd pays a deposit to A Ltd of £10,000.

B Ltd then enters into a sub-sale contract with C Ltd to sell the land to C Ltd for £110,000.

Unlike in the example of an assignment given above, C Ltd has not assumed any contractual commitment to A Ltd.

On completion, A Ltd transfers the land at the direction of B to C Ltd.

C Ltd pays B Ltd £110,000.

B Ltd pays A Ltd the outstanding amount of £90,000.

B Ltd has made a profit of £10,000.