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HMRC internal manual

Stamp Duty Land Tax Manual

Special provisions relating to partnerships: Application of exemptions and reliefs

A and B are 50:50 partners in a property investment partnership. They admit C upon payment of £500,000 for a 33.33% interest.

The relevant partnership property is all within a disadvantaged area but some is residential and some non-residential. The market value of the land held is apportioned to £300,000 residential and £1m non-residential (it is agreed that this is a just and reasonable apportionment).

SDLT will be chargeable in accordance with Para 14(7) on a proportion of the market value of the relevant partnership property. In this instance that proportion is 33.33% (as C has acquired a third share), C would be liable to SDLT on 33.33% x £1.3m i.e. £433,333.33.

Para 26(4) allows the proportion attributable to the residential property within a disadvantaged area to be excluded from the chargeable consideration if below £150,000.

Here, the proportion attributable to the residential property will be 33.33% of £300000, i.e. £100,000.

Therefore SDLT will be due on £433,333.33 less £100,000 i.e. £333,333.33.