Guidance

Stamp Duty Land Tax: linked purchases or transfers

Find out how to apply Stamp Duty Land Tax (SDLT) when there are multiple sales or transfers between the same buyer and seller.

Overview

You do not pay Stamp Duty Land Tax if you buy a property in:

When 2 or more property transactions involve the same buyer and seller, they count as ‘linked’ for Stamp Duty Land Tax. HMRC may count people connected to a buyer or seller as being the same buyer or seller.

If 2 or more transactions are treated as linked then the buyer pays any Stamp Duty Land Tax due on the total value of all linked transactions. This may mean that they pay a higher rate of Stamp Duty Land Tax than if the transactions are counted individually.

If all the properties that link are residential, apply the residential property rates to the linked transactions.

Higher rates of Stamp Duty Land Tax may be charged from 1 April 2016 on purchases of additional residential properties.

If any or all of the properties that link are non-residential, apply the non-residential property rates to the linked transactions.

Stamp Duty Land Tax transactions that count as linked

HMRC counts transactions as linked if:

  • there’s more than one transaction
  • the transactions are between the same buyer and seller or between people connected with either of them
  • the transactions are part of a single arrangement or scheme or part of a series of transactions

Connected persons

A connected person could be your relative, for example your brother, sister, parent, grandparent, husband, wife or civil partner, or one of their relatives.

If the buyer or seller is a business, a connected person would be a business partner and their relatives. It also includes companies and groups of companies who are connected to the business.

Different kinds of linked transactions

How and when you do a Stamp Duty Land Tax return depends on the type of linked transaction you have.

Transactions linked as part of a single arrangement

Some transactions are linked because they’re part of the same single arrangement or scheme. It’s the same whether you document them separately or not. If each transaction has a separate contract, and if the sales are part of the same deal, they count as linked for Stamp Duty Land Tax.

If you sell a residential property in such a way that one person buys the house but their relative buys the garden, the 2 transactions are linked. They’re connected people and they’re buying things from the same seller as part of a single deal.

Because the 2 transactions are linked, calculate the amount of tax due on the total chargeable consideration for all the transactions. Then, apportion this amount between the transactions in proportion to their share of the total chargeable consideration.

Transactions linked as part of a series of transactions

When a sale is followed by one or more related sales, if there’s something to link all the transactions together, they count as linked transactions for Stamp Duty Land Tax. There’s no limit to the length of time between the transactions.

Example calculations to work out tax due as part of a series of transactions

The following guidance includes example calculations to work out the amount of Stamp Duty Land Tax you would pay if purchasing properties as part of a series of transactions.

You’re buying a new house from a builder for your family to live in. Later, you buy a second and then a third house from the same builder to hold as investments. The builder offers a special price for the second and third houses. You pay £280,000 for the first house and £275,000 each for the second and third houses once they are finished.

The 3 transactions are linked as part of a series. You must work out the amount of tax due on the total chargeable consideration for all the transactions to date, at the rates in force at the time of that transaction. Then, you must apportion this amount to each transaction in proportion to its share of the total chargeable consideration. You may need to pay more tax on the earlier transactions.

In this example, all transactions take place when the thresholds and rates in force are those that were introduced on 23 September 2022.

When calculating Stamp Duty Land Tax, the amount calculated is round down to the nearest pound.

On the first transaction (the first house bought for £280,000), tax is due at 0% on £250,000 and 5% on £30,000. The total would be £1,500.

On the second transaction (the second house, bought for £275,000), the higher rates of Stamp Duty Land Tax for additional properties apply because you own more than one residential property. This is an extra 3% on top of the residential rates for a single property transaction. The higher rates do not apply to the first transaction.

The tax due on the total consideration of £555,000 for the 2 properties is shown in the following calculations.

Calculation on property 1

  1. Calculate the tax due on the total of the consideration for the linked transactions at standard residential rates.

    0% on the first £250,000 and 5% on the next £305,000. Total = £15,250

  2. Apportion the result of the previous step according to the proportion of the total linked consideration that is specific to property 1.

    £15,250 × (£280,000 ÷ £555,000) = £7,693 (less £1,500 tax already paid on the first transaction) = £6,193

Calculation on property 2

  1. Calculate the tax due on the whole of the consideration for the linked transactions at the higher rates for additional properties.

    3% on the first £250,000 and 8% on the next £305,000. Total = £31,900

  2. Apportion the result of the previous step according to the proportion of the total linked consideration that is specific to property 2.

    £31,900 × (£275,000 ÷ £555,000) = £15,806

At this stage, additional tax of £6,193 is due for the earlier transaction at the same time as the £15,806 tax for the second transaction.

On the third transaction (the third house, bought for £275,000), the tax due on the total consideration of £830,000 for the 3 properties is shown in the following calculations.

Calculation on property 1

  1. Calculate the tax due on the total of the consideration for the linked transactions at standard residential rates.

    0% on the first £250,000 and 5% on the next £580,000. Total = £29,000

  2. Apportion the result of the previous step according to the proportion of the total linked consideration that is specific to property 1.

    £29,000 × (£280,000 ÷ £830,000) = £9,783 (less tax already paid £1,500 + £6,193) = £2,090

Calculation on property 2

  1. Calculate the tax due on the whole of the consideration for the linked transactions at the higher rates for additional properties.

    3% on the first £250,000 and 8% on the next £580,000. Total = £53,900

  2. Apportion the result of the previous step according to the proportion of the total linked consideration that is specific to property 2.

    £53,900 × (£275,000 ÷ £830,000) = £17,858 (less £15,806 of tax already paid) = £2,052

Calculation on property 3

  1. Calculate the tax due on the whole of the consideration for the linked transactions at the higher rates for additional properties.

    3% on the first £250,000 and 8% on the next £580,000. Total £53,900

  2. Apportion the result of the previous step according to the proportion of the total linked consideration that is specific to property 2.

    £53,900 × (£275,000 ÷ £830,000) = £17,858

At this stage, additional tax of £2,090 is due for the first transaction and additional tax of £2,052 is due for the second transaction. These additional amounts are due at the at the same time as the £17,858 tax for the third transaction.

Total tax on the 3 linked transactions is £45,499.

Relief for transfers involving multiple dwellings may be claimed on these transactions.

If the transactions in this example were not linked, the amount of Stamp Duty Land Tax payable on the second and third transactions would still have been charged at the higher rates for additional dwellings, but the first £250,000 of the consideration for each transaction would be charged at 3% and the remaining £25,000 at 8%. So, the total Stamp Duty Land Tax due on the 3 transactions would have been £20,500.

This could be the case if the purchaser had bought each of the 3 houses from the same builder in 3 completely separate transactions with:

  • no prior agreement or option
  • no special price or discount
  • anything else to link them

Notify HMRC and pay Stamp Duty Land Tax

When you complete transactions you’ll usually need to tell HMRC by filling a Stamp Duty Land Tax return. With linked transactions you must notify each purchase or transfer within 14 days of the effective date, this is usually the completion date.

Some land and property transactions do not have to be notified to HMRC.

When you fill in a return online you must show that there are linked transactions. If you’re filling a paper SDLT1 form put an X in box 13.

Return and payment for a single scheme or arrangement

If the linked transactions are part of the same scheme or arrangement and they have the same effective date, you can make a single return and one payment. If you do, the transactions count as a single transaction and all the buyers count as joint buyers and all must sign the return.

If they have different effective dates, for example, if one buyer bought the house on one date and the other bought the land on a different date, you’d fill in 2 returns and send separate payments of Stamp Duty Land Tax.

Returns and payments for a series of linked transactions

If there’s a series of linked transactions, notify HMRC and pay any Stamp Duty Land Tax due when you complete each purchase.

You’ll do a separate return for each later linked transaction and, on each occasion you’ll submit a further return for each earlier transaction if more tax is due on those transactions.

To do this, write to HMRC Stamp taxes, and quote the Unique Transaction Reference Number for each of the linked transactions. Set out the revised amount of tax due on the earlier transaction (that result from the later linked transaction) on your return.

Stamp Duty Land Tax rates

You pay Stamp Duty Land Tax on transactions worth more than the threshold. There is more than one threshold for Stamp Duty Land Tax, with different rates for each.

You can find out more about thresholds and rates for Stamp Duty Land Tax.

Scottish transactions

Where Stamp Duty Land Tax applies to a transaction it cannot be linked with any transaction where Land and Buildings Transaction Tax applies, even if it includes land in Scotland.

Welsh transactions

Where Stamp Duty Land Tax applies to a transaction it cannot be linked with any transaction where Land Transaction Tax applies, even if it includes land in Wales.

Help and advice on linked transactions

For more help contact the HMRC Stamp Taxes helpline.

Published 25 June 2013
Last updated 14 October 2022 + show all updates
  1. On 23 September 2022 the Stamp Duty Land Tax (SDLT) nil-band rate for residential properties was raised from £125,000 to £250,000. The examples in the 'Transactions linked as part of a series of transactions' section have been updated to reflect this change.

  2. The example for different kinds of linked transactions has been updated to align with the changes to the residential nil-rate threshold.

  3. Purchase deadlines extended for reduced rates for Stamp duty Land Tax.

  4. The government has temporarily increased the nil rate bands of residential Stamp Duty Land Tax from £125,000 to £500,000.

  5. From 1 April 2018 SDLT will no longer apply in Wales. You'll pay Land Transaction Tax which is dealt with by the Welsh Revenue Authority.

  6. First published.