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HMRC internal manual

Stamp Duty Land Tax Manual

From
HM Revenue & Customs
Updated
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Application: Transfer to a connected company: Example 4

Example 4

Individual A transfers freehold residential property to company B in consideration of the issue of new shares in company C.

SDLT considerations are:

  1. Is A connected to B in accordance with S1122 CTA 2010?
  2. Is A connected to C in accordance with S1122 CTA 2010?

If so what is the market value of the property transferred?

If A is not connected to B or C the chargeable consideration will be the market value of the shares acquired at the rate applicable for residential property at the effective date of the transaction.

If A is connected to B or C S53 applies and the chargeable consideration for the transaction will be the market value of the property at the effective date. If this were £275,000 this would be the chargeable amount, if however the market value were less than the market value of the shares issued the chargeable consideration would be the market value of the shares, chargeable at the appropriate rate.