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HMRC internal manual

Stamp Duty Land Tax Manual

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HM Revenue & Customs
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Scope: What is chargeable: Transfer of rights: Impact on original contract FA03/S45

Where a purchaser (B) transfers his rights under a contract for a land transaction (the ‘original contract’) to a third party (C) the charge on B depends on whether completion or substantial performance of the original contract takes place before completion or substantial performance of the secondary contract (SDLTM01070).

Completion or substantial performance of the original contract at the same time as, and in connection with, completion or substantial performance of the secondary contract is disregarded. This means there is no charge on B, and no requirement for B to submit a land transaction return, if completion or substantial performance of the original contract takes place at the same time as, and in connection with, completion or substantial performance of the secondary contract. This is often referred to as ‘sub-sale relief’. ’At the same time as’ should be interpreted in accordance with normal conveyancing practice, with no event intervening between completion of the original contract and completion of the secondary contract.

This is illustrated by example 1 at SDLTM01090.

It is immaterial for stamp duty land tax purposes whether the transfer of the chargeable interest to C is effected by one document or two documents, provided that both documents take effect at the same time and there is no intervening event. Where both documents require registration a covering letter to the appropriate registry may be needed.

Where, on the other hand, substantial performance of the original contract takes place in advance of completion or substantial performance of the secondary contract there will be a charge on B under FA03/S44(4).

This is illustrated by example 2 at SDLTM01090.