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HMRC internal manual

Stamp Duty Land Tax Manual

HM Revenue & Customs
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Application: Linked transactions FA03/S108

Linked transactions are those which form part of a single scheme, arrangement or series of transactions between the same vendor and purchaser or, in either case, persons connected with them. Corporation Tax Act 2010/Section 1122 defines when parties are connected.

If a vendor, for example, advertises a house with gardens for sale and the purchase is structured in such a way that the husband buys the house and his wife buys the gardens, these will be regarded as linked transactions.

The rate of tax will be determined by the sum of the chargeable considerations paid for both house and gardens.

It is a question of fact whether of not transactions are linked. A purchaser will need to make a full examination of all the circumstances leading to the transactions before completing their land transaction return.

Just because two transactions are between the same purchaser and seller does not necessarily mean they are linked. The transactions will be linked however if they are part of the same deal.

On an exchange of properties between A and B the acquisition of property by A and the acquisition of property by B are not linked transactions (even if A and B are connected persons) unless all the transactions occur before 19 July 2007.

If two transactions are documented separately

The form in which the transactions are documented will not determine whether they are linked or not. For example, documenting transactions with separate contracts will not prevent them being linked if the transactions are under arrangements which indicate they are part of a single deal.

Series of transactions

Series of transactions means something more than that one transaction following the other. There must be something else to connect the transactions.

It would however be a question of fact whether purchases are totally unrelated. In particular the purchaser needs to consider whether the fact that the first transaction had happened had affected the terms of the second transaction.

Where successive transactions are linked, for example the grant of an option and its exercise, extra tax can be due for the first transaction.

Any extra tax is payable at the same time as tax is payable on the second transaction. See FA03/S81.

Linked transactions with the same effective date can be reported as a single notifiable transaction using a single land transaction return, this is at the discretion of the purchaser.

Where this is done, the transactions will be treated as a single transaction and all the purchasers, if more than one will be treated as joint purchasers. See SDLTM31600.