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HMRC internal manual

Stamp Duty Land Tax Manual

HM Revenue & Customs
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Scope: How much is chargeable: Non-cash consideration: Land partitioned FA03/SCH4/PARA6: Example

A and B own a farm jointly in equal shares.

They decide to partition the farm and it is agreed that A will take 50% of the land and B will take 50% of the land.

The total market value of the land is £2m.

If each half of the land is of equal value then no Stamp Duty Land Tax (SDLT) is chargeable.

However the land taken by A may include the farmhouse and farm buildings.

The land retained by A has a value of £300,000 greater than the land that is to be retained by B.

A’s share is worth £1,150,000 and B’s share is worth £850,000 and A might compensate B by paying £150,000 to equalise the partition.

This £150,000 would be subject to a charge to SDLT.