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HMRC internal manual

Stamp Duty Land Tax Manual

HM Revenue & Customs
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Special provisions relating to partnerships: Transfers of a chargeable interest from a partnership

As example 1 at SDLTM33850 but Company A and Company B each have a 50% interest in the partnership.

Step One

Identify the relevant owner or owners.

Company B is a relevant owner because, immediately after the transaction, it is entitled to a proportion of the chargeable interest and immediately before the transaction it was a partner.

Step Two

For each relevant owner, identify the corresponding partner or partners.

Company B is its own corresponding partner because, immediately before the transaction it was a partner and it is the relevant owner.

(Company A can not be a corresponding partner as it is not an individual)

Step Three

Company B is entitled to 100% of the chargeable interest immediately after the transaction.

As there is only one corresponding partner, this proportion is all apportioned to Company B.

Step Four

The lower proportion for each person who is a corresponding partner, here just Company B, as the proportion of the chargeable interest attributable to the partner, or if lower, the partnership share attributable to the partner.

In this case the figures are 100% (proportion of the chargeable interest attributable to the partner) and 50% (partnership share attributable to the partner) respectively, so the lower proportion is 50.

Step Five

We just have one lower proportion, so there is nothing to add together. As a result, the sum of the lower proportions in this instance is 50.

As this is less than 75 Para 24 does not apply so the chargeable consideration is 50% of the market value, i.e. £2.5m.

However, as the companies are grouped the provisions of Schedule 7 Finance Act 2003 apply, modified by para27 (as applied by Para 25(2)) and Company B may be able to claim group relief - see SDLTM34360.