Problems with partnerships and stamp duty land tax

There is a common thread when dealing with connected parties in taxation which most general practitioners and general tax advisers would take to mean that connected parties always involve a market value charge. In stamp duty land tax however this is not the case. Indeed the provisions of FA 2003 Sch 15 produce some counter intuitive results when transactions are taking place between partnerships and connected parties.

This has led to some large and unanticipated errors in stamp duty land tax calculations and consequent overpayments of the tax with the result that claims against conveyancers and advisers are on the rise.

Basic law

Transfers to and from partnerships to connected parties are governed by FA 2003 Sch15 para 10 and para 18 respectively. They both apply the same formula to calculate the chargeable consideration as MV x (100 – SLP) where:

• MV = market...