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HMRC internal manual

Stamp Duty Land Tax Manual

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HM Revenue & Customs
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Application of exemptions and reliefs: Group Relief

There is a transfer of a chargeable interest from SP/Sc LP to B Ltd.

We are looking at a transfer from a partnership so the provisions of para 2 will apply we therefore need to establish any SDLT liability using para18 and 20 - see SDLTM33750.

Step One

Identify the relevant owner or owners.

B Ltd 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.

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

(C Ltd can not be a corresponding partner as it is not an individual)

Step Three

B Ltd 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 B Ltd.

Step Four

The lower proportion for each person who is a corresponding partner (here B Ltd) is 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% (the proportion of the chargeable interest attributable to the partner) and 50% (the 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.

Chargeable consideration is MV x (100-SLP) %

MV x 50% = 50%

Therefore we have a 50% of market value charge.

Utilising para 2(1) we would look through the partnership to the partners and this is effectively a transfer from B Ltd and C Ltd to B Ltd, i.e. C Ltd transfers its 50% interest in the property to B Ltd.

As B Ltd and C Ltd are both 100% subsidiaries of A Ltd Sch 7 will apply (providing the requirements of Sch7/para2 are met) which will give relief against the charge identified under Sch15.