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HMRC internal manual

Stamp Duty Land Tax Manual

From
HM Revenue & Customs
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Paragraphs 4-8 - Assignments of rights

Paragraphs 4 to 8 of FA03/SCH2A are concerned with pre-completion transactions that are assignments of rights.

Paragraph 4 outlines how the transferee is treated in these cases. Broadly speaking, the consideration for the transferee’s acquisition is whatever the transferee gives under the original contract plus whatever the transferee gives for the assignment of rights.

The vendor for the transferee’s acquisition is generally the original vendor under the original contract, although there are exceptions to his general rule (see paragraph 8).

Paragraph 5 creates a ‘notional land transaction’ for the transferor under an assignment of rights (sub-paragraph (1)). If there are successive assignments, then there is also a notional ‘additional land transaction’ for each additional subsequent transferor in the chain (sub-paragraph (2)). Broadly speaking, the consideration for a notional land transaction is any consideration given under the original contract by either the transferee or the transferor. For an additional land transaction, any consideration given by the purchaser under the additional land transaction for the preceding assignment is also brought into charge.

Where the original contract is substantially performed but subsequently rescinded or annulled, the transferee’s position will be covered by the normal rules in section 44(9). Similar provision is made in paragraph 6 for a notional or additional land transaction within paragraph 5.

An assignment of rights may relate to only part of the land that is the subject-matter of the original contract. In such a case, paragraphs 4 and 5 apply as if the original contract were split into two contracts: one for the land that is subject to the assignment and one for the rest of the land (paragraph 7).