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HMRC internal manual

Stamp Duty Land Tax Manual

Scope: What is chargeable: Transfer of rights: Series of transfers: Example

A Ltd contracts to sell land with B Ltd for £1,000,000.

B Ltd pays a deposit to A Ltd of £100,000.

B Ltd then assigns his rights under the contract with A Ltd to C Ltd for £25,000

C Ltd then assigns to D Ltd for £35,000.

B Ltd, C Ltd and D Ltd do not take possession of the whole or substantially the whole of the land.

The assignments by B Ltd to C Ltd and by C Ltd to D Ltd are secondary contracts.

On completion A Ltd is required to transfer the land directly to D Ltd.

D Ltd pays the outstanding purchase price of £900,000 to A Ltd.

D Ltd will be liable to stamp duty land tax on £935,000, being the £35,000 given to C Ltd for the transfer of rights by virtue of FA03/S45 (3)(b)(ii) and the £900,000 paid to A Ltd by virtue of FA03/S45 (3)(b)(i).

Although the transfer by A Ltd to D Ltd completes the A Ltd-B Ltd and the B Ltd-C Ltd contracts, this is disregarded by FA03/S45(3) and neither B Ltd nor C Ltd are liable to pay stamp duty land tax.