SDLT Group Relief: Transferring Property Within Your Group

When transferring property between companies in the same corporate group, you may be eligible for Stamp Duty Land Tax (SDLT) Group Relief, which can exempt the transaction from SDLT. However, certain conditions must be met for the relief to apply.

Eligibility Criteria

To qualify for Group Relief:

• The companies involved must be part of the same group, with at least 75% ownership (direct or indirect)
• The transfer must be for genuine commercial reasons, not primarily for tax avoidance
• Both companies must remain within the same group for at least 3 years after the transfer to avoid clawback of the relief

Note that this relief applies in England and Northern Ireland. Scotland and Wales have different regimes (LBTT and LTT), so check local rules if your transaction involves those jurisdictions.

Common Issues to Watch For

• Group Structure: The 75% ownership requirement must be met through proper ownership paths; it’s not just about majority control.
• SDLT Returns: An SDLT return must still be filed even if no tax is payable, using the correct relief code.
• Clawbacks: If a company leaves the group within 3 years of the transfer, the relief can be withdrawn and SDLT reassessed.
• Timing: Late or incorrect submissions can lead to penalties or loss of relief.

Supporting Your Claim

Group Relief claims require careful planning and documentation. This typically involves:

• Reviewing and confirming group ownership structures
• Preparing SDLT returns with the appropriate relief codes
• Drafting intra-group agreements or other supporting paperwork
• Managing communications with HMRC to ensure compliance

Summary

Group Relief can eliminate SDLT on internal property transfers within corporate groups, but the rules are strict and errors can be costly. It’s important to review your transaction and group structure carefully to ensure relief applies and to meet ongoing obligations to avoid clawbacks.

If you’re considering a property transfer within a group, early assessment of eligibility and compliance requirements can help avoid unexpected tax liabilities.