HMRC internal manual

Stamp Duty Land Tax Manual

Scope: When is Stamp Duty Land Tax (SDLT) chargeable: Contracts and substantial performance FA03/S44: General guidance

The fact that a purchaser enters into a contract for a land transaction does not automatically crystallise a liability to SDLT FA2003/S44(2) refers.

Generally, a contract governing a land transaction which is to be completed by a conveyance will be chargeable on completion.

Completion, conveyance and contract are defined at SDLTM08100.

But where such a contract is substantially performed before it is formally completed, the contract is treated as if it were itself the transaction provided for in the contract.

In this type of case the date of substantial performance is the effective date in accordance with FA03/S44(4), FA03/S44A(3) & FA03/S45A(8).

Broadly, substantial performance is the point at which

  • any payment of rent is made
  • payment of most of the consideration other than rent is made
  • the purchaser is entitled to possession of the subject matter of the transaction

See SDLTM07900.