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HMRC internal manual

Stamp Duty Land Tax Manual

Application: Companies: Deemed market value FA03/S53

Section 53 Finance Act 2003 applies to all transfers between a vendor (individual or company) and a company connected to them, when the company is the purchaser. The chargeable consideration for such transfers will be not less than the market value at the effective date, of the property transferred, irrespective of the consideration (or lack of it) actually passing.

S53 also has effect where a vendor (individual or company) transfers property to a company and some or all of the consideration for that transfer consists of the issue or transfer of shares in a company with which the vendor is connected.

Corporation Tax Act 2010/Section 1122 gives the basis upon which an individual/company can be connected to a company.

The exemption at FA03/SCH3/PARA1 for transactions where there is no chargeable consideration does not apply and the market value will be used.

However FA03/S53 is subject to any other provision affording exemption or relief from stamp duty land tax.

FA03/S54 provides that market value will not be imposed in any of the following circumstances where

  • immediately after the transaction the company holds the property as a trustee in the course of the business of trust management
  • immediately after the transaction the company holds the property as trustee and the vendor is only connected with the company by virtue of Corporation Tax Act 2010/Section 1122 in his capacity as settlor
  • the vendor is a company and the transaction is, or is part of, a distribution of assets, whether or not on the winding up of a company

This is provided that the subject matter of the transaction, or an interest from which that interest is derived, has not within the preceding three years been the subject of a transaction in respect of which a claim to group relief was made by the vendor.

It is not HM Revenue & Customs intention that FA03/S54(4) should be prevented from applying where a group relief claim was made by the vendor but recovered under FA03/SCH7/PARA3 either at the time of or before the effective date of the transaction

If any of these exceptions apply stamp duty land tax will only be charged on the chargeable consideration paid.

Connected persons has the same meaning as in Corporation Tax Act 2010/Section 1122.

Company means any body corporate.

Shares includes stock and the reference to shares in a company includes a reference to securities issued by a company.