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HMRC internal manual

Stamp Duty Land Tax Manual

Special provisions relating to partnerships: Transfer of interest in a property investment partnership

A partnership, consisting of individuals G and H (each with a 50% interest), owns the freeholds of many houses in multiple occupation, letting them as a commercial undertaking. None of the properties were introduced by the partners or persons connected to them.

The partners spend a significant amount of time managing the tenants, collecting rents and undertaking repairs. The activity amounts to a business and the partnership is a property investment partnership.

G wishes to introduce his daughter J as a partner. He gives J half of his interest in the partnership, so J acquires a 25% interest in the profits.

This is a transfer of an interest in a property investment partnership. However, no consideration is given and none of the other provisions in Para 14(3B) apply to make this a Type A transfer. As a result, it is a Type B transfer: the property taken into account as relevant partnership property excludes any property the transfer of which did not fall to be taxed under Para10 when originally brought into the partnership.

Here, the property was all purchased from parties unconnected with the partners, so none of the property counts as relevant partnership property. There is, therefore, no charge to SDLT on this transfer.