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HMRC internal manual

Stamp Duty Land Tax Manual

Application of exemptions and reliefs: Group Relief

In general, only an individual can be a corresponding partner to a relevant owner in Step Two of the calculation of the sum of the lower proportions - see SDLTM33550. However, this general rule is subject to two exceptions, provided by Para 12(3) and Para27A. An example of the application of the latter follows:

Company A transfers a chargeable interest to a partnership consisting of Individual 1, Individual 2 and Company B. Company A and Company B are wholly owned by Company C, which is in turn owed by the father of Individual 1 and Individual 2. The transfer is therefore within Para10 as Company A is connected to individuals 1 and 2 and Company B.

Company B is not a corresponding partner of the relevant owner (Company A) as although it is a partner, it is not the relevant owner, nor an individual connected to the relevant owner. However, as the two companies are grouped, they are both 75% subsidiaries of a third company, Company C, so Para 27A (1) applies. As a result, Para 27A (2) reduces the charge to the amount that would have been chargeable had the connected company been a corresponding partner for the purposes of calculating the sum of the lower proportions in Para12.

In the particular circumstances given above, the charge is reduced to nil because the SLP is 100%, as the connected company is treated as a corresponding partner.

Where Para27A applies, Para 7A (3) makes some consequential amendments to the rules set out in FA03/Sch7.