In this section:
- What value is SDLT charged on?
- SDLT for leasehold purchases
- SDLT when transferring ownership of land or property
- SDLT on a shared ownership property
- SDLT where there are two or more linked purchases or transfers
- Land or property transactions that qualify for SDLT relief
- Obtaining HMRC advice on how SDLT will apply
- SDLT calculators
SDLT where there are two or more linked purchases or transfers
There are some situations when two or more property transactions that involve the same buyer and seller are treated as being 'linked' for Stamp Duty Land Tax (SDLT) purposes. People connected to a buyer or seller can count as being the same buyer or seller.
If two or more transactions are treated as linked then the buyer must pay any SDLT due on the total value of all the linked transactions. This may mean that they have to pay a higher rate of SDLT than if the transactions had been treated individually.
This guide will help you to understand when two or more transactions are linked. It explains the different ways that transactions might be linked and how this affects the SDLT position.
On this page:
- When is an SDLT transaction treated as linked?
- Transactions that are linked as part of a single arrangement
- Transactions that are linked as part of a series of transactions
- Notifying HMRC and paying Stamp Duty Land Tax
- Stamp Duty Land Tax rates
- Help and advice on linked transactions
When is an SDLT transaction treated as linked?
HM Revenue & Customs (HMRC) will consider transactions to be linked if all of the following apply:
- there is more than one transaction
- the transactions are between the same buyer and seller - or between people connected with either of them
- the transactions form part of a single arrangement or scheme or part of a series of transactions
Meaning of ‘connected people’
Two or more transactions can be connected if they involve the same buyer and seller - or someone who's connected to them.
The definition of a connected person is quite broad. For example, it could be a relative like a brother or sister, a parent or a grandparent. Or it could be a husband, wife or civil partner - or perhaps one of their relatives. If the buyer or seller is a business, a connected person would include business partners and their relatives. It also includes companies and groups of companies who are connected to the business.
The different types of linked transaction
Read the related sections below for examples of when transactions are linked as part of the same arrangement or linked because they're part of a series of transactions. How and when an SDLT return must be made differs depending on the type of link it is.
It’s up to the buyer to decide which type of linked transaction applies.
Transactions that are linked as part of a single arrangement
Some transactions are linked because they're part of the same single arrangement or scheme. It makes no difference whether or not they're separately documented. So even if each transaction has a separate contract, if the purchases are part of the same deal then they're treated as being linked for the purpose of SDLT.
For example, if a residential property was sold in such a way that Mrs Smith purchased the house but her husband Mr Smith bought the garden, the two transactions would be linked. This is because Mr and Mrs Smith are connected people and they're buying things from the same seller as part of a single deal.
Because the two transactions are linked as part of a single arrangement, they're treated as one transaction for SDLT purposes. The values of the individual transactions are added together and SDLT is payable at the appropriate rate on the total if it exceeds the threshold.
Transactions that are linked as part of a series of transactions
Sometimes a purchase is followed by one or more related purchases. If there's something to link all the transactions together then they're treated as linked purchases for SDLT. There's no limit on the length of time between the transactions.
For example, a property speculator might agree to buy three new houses from a builder. The builder offers a special price for the houses because the speculator agrees in advance to buy three. It's agreed that the buyer will pay £180,000 for each house once it's complete.
In this example, the three transactions are linked as part of a series. So SDLT is payable on the total value of the three transactions - £540,000. The buyer pays SDLT at 4 per cent on £540,000, which is £21,600.
If the transactions in the above example hadn't been linked, SDLT would have been payable at the lower rate of 1 per cent on the value of each individual transaction. So the total SDLT due on the three transactions would have been £5,400. This may have been the case if the speculator had bought each of the three houses from the same builder in three completely separate transactions with no prior agreement or option, no special price or discount, or anything else to link them.
Notifying HMRC and paying Stamp Duty Land Tax
When you complete transactions you'll usually need to notify HMRC by completing an SDLT return. With linked transactions you must notify the first purchase or transfer within 30 days of the effective date (this is usually the completion date)
Some land and property transactions do not have to be notified to HMRC.
Find out which transactions don’t need to be notified
When you fill in a return online you must indicate, where asked, that there are linked transactions. If you are completing a paper SDLT1 form place 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 choose to make a single return and one payment. When you do this the transactions are treated as a single transaction and all the purchasers are treated as joint purchasers and all have to sign the return. This would be the case in the example given above where Mr and Mrs Smith buy two parts of the same property between them.
If they have different effective dates (eg if Mrs Smith in the example above bought the house on one date and Mr Smith bought the land on a different date) then two returns and separate payments are needed.
Returns and payments for a series of linked transactions
If there is a series of linked transactions you’ll need to notify HMRC and pay any SDLT due when you complete the first purchase. Then when you make any further linked transactions you'll usually need to notify HMRC again and pay any additional SDLT due on the earlier transaction(s). This may be calculated at a higher rate than previously because the total value of the linked transactions has increased.
If this next linked transaction occurred within 12 months after the deadline for notifying HMRC about the previous transaction, you can pay the additional SDLT due by amending the original return. But if it's more than 12 months after the filing deadline for the previous transaction, you'll need to complete another return.
Based on the earlier example, if the property speculator buys the first house of three at £180,000 they pay SDLT at 1 per cent on that transaction - £1,800. Six months later they buy the second house, again for £180,000. The total value for SDLT purposes is now £360,000. The appropriate rate for a transaction of this value is 3 per cent, meaning that SDLT of £10,800 is now due on the total value of both transactions. The buyer notifies HMRC by amending their original return to show a linked transaction and pays the balance of what they owe - £10,800 minus the £1,800 already paid which is £9,000.
Find out how to complete a Stamp Duty Land Tax return
Read about amending a Stamp Duty Land Tax return after filing it
Stamp Duty Land Tax rates
SDLT becomes due on transactions worth more than a certain amount. This amount is known as the threshold. There is more than one threshold for SDLT, with different rates payable for each.
Both the thresholds and the rates can vary from year to year. You can check both in our guide on Stamp Duty Land Tax rates and thresholds.
Check the current Stamp Duty Land Tax rates and thresholds
Help and advice on linked transactions
If you need any help with deciding how the SDLT rules apply in a particular situation you can contact the HMRC Stamp Taxes Helpline on Tel 0845 603 0135. The helpline is open from 8.30 am until 5.00 pm, Monday to Friday except bank holidays.
You might sometimes want to get advice in advance from HMRC on how to treat linked transactions for SDLT purposes. You can read more in the guide 'Obtaining advice on how SDLT will apply' by following the link below.
