Section 75A SDLT: the notional transaction explained
Section 75A in brief
Where all section 75A conditions are met, HMRC says the land steps in an arrangement are replaced by one notional transaction from V to P.
- P must file the SDLT return and pay any tax due.
- Non-land agreements may still affect the amount used.
- The full arrangement, not one document, needs to be reviewed.
Scroll down for the full analysis.
Read the original guidance here:
Section 75A SDLT: the notional transaction explained
When section 75A applies, HMRC may calculate stamp duty land tax as if the parties had completed a different property deal, rather than the series of land steps their documents record. HMRC can recast the arrangement. It can ignore the land steps in a wider arrangement and replace them with one imagined, or notional, transaction. That can change who must file the SDLT return and pay any tax.
What this rule is about
Linked property arrangements can use several steps instead of one direct sale. Section 75A is an anti-avoidance rule for certain arrangements of that kind.
The rule does not apply merely because a deal has more than one document or party. The parties must meet all its conditions first. This page explains what follows after that point.
That distinction matters. It can move the SDLT focus away from the steps people actually signed.
What the official source says
Once all the section 75A conditions are met, HMRC’s manual tells readers to disregard the land transactions in the arrangement. The manual substitutes one notional land transaction for them.
In that replacement transaction, V gives up the relevant property right and P receives it. A property right can include an estate, interest, right or power over land. The manual identifies P as the buyer for this imagined transaction.
- The land transactions within the arrangement are ignored for this purpose.
- They are replaced by one notional land transaction.
- V is treated as giving up the relevant property right.
- P is treated as receiving that property right.
- P must deal with the SDLT return for the notional transaction.
- P must pay any SDLT due on that transaction.
HMRC does not ignore every step. It says that steps which are not land transactions remain relevant. Anyone working out the amount for the notional transaction should consider their payments.
What this means in practice
The paperwork may show several deals between different people. But, if section 75A applies, HMRC may instead base the SDLT answer on a direct imagined transfer from V to P.
A payment made under a separate, non-land agreement can still affect the calculation when it forms part of the overall arrangement, even though that agreement itself transfers no land. It still matters. Calling a payment something else does not, by itself, take it out of the calculation.
- Do not look only at the final transfer document.
- List every agreement connected with the overall arrangement.
- Check who paid money, or gave something else of value.
- Separate land steps from steps which do not transfer land.
- Keep the figures for the non-land steps in the analysis.
How to analyse it
Start with the whole arrangement, not one contract in isolation. Ask whether the parties meet the conditions for section 75A. Only then does HMRC apply the replacement rules in its manual.
- Identify V: the person who gives up the property right.
- Identify P: the person who ends up with that right.
- Map each connected step in date order.
- Mark which steps are land transactions.
- Record payments and other value given in every step.
- Test whether all section 75A conditions are met.
- If they are, replace the land steps with the notional transaction.
- Work out the amount for that transaction, including relevant non-land steps.
- Prepare the SDLT return on the basis that P is the buyer.
The source does not give the full section 75A test. So you should not jump from a complicated deal to a conclusion that the rule applies.
Example
Imagine that V has a property right in a site. Several linked agreements are used so that Priya, P, ends up with that right. One agreement transfers land. Another is a separate service agreement under which Priya pays £25,000.
Assume, for this example, that the parties meet every section 75A condition, so HMRC ignores the land steps and substitutes a notional transfer from V to Priya when it calculates SDLT. That is HMRC’s approach. HMRC does not ignore the £25,000 service payment merely because the service agreement is not a land transaction. Anyone working out the amount for the notional transaction should consider it.
The example does not say that the calculation will always include the £25,000 in full. The source does not provide that detailed calculation. It shows why you cannot simply leave out the separate agreement.
Why this can be difficult in practice
Real arrangements rarely arrive as neat flow charts. Payments may pass through companies, advisers or other parties. Documents can describe a payment in ways that hide its link to the property deal.
You might think a non-land agreement is irrelevant because it does not transfer property. HMRC’s manual reaches the opposite conclusion on the calculation point, telling the person doing the calculation to take that agreement into account rather than disregard it. Its label does not decide the issue.
- A label on an agreement may not explain what a payment was really for.
- Several small payments can be as important as one large payment.
- The parties named in documents may not show the full economic picture.
- The section 75A conditions must be tested before applying the notional transaction.
- HMRC guidance explains its view, but the legislation remains the law.
Key takeaways
- Section 75A can replace land steps with one imagined SDLT transaction.
- Where it applies, P is treated as the buyer for that transaction.
- Non-land steps can still matter when working out the relevant amount.
Technical analysis
For advisers, and for anyone who wants to check the law behind this page. You do not need this section to understand the guidance above.
Legislation
- FA 2003 section 75A — conditions for the anti-avoidance rule to apply; replacement of scheme steps with a notional sale; amount used for the notional transaction
- FA 2003 section 76 — time limit for filing a land transaction return; tax calculation required in a chargeable transaction return
- FA 2003 section 77 — notional section 75A transactions must be reported
Official guidance
The pages below are HMRC’s guidance. Guidance is not law. It sets out how HMRC reads the legislation, and it is not binding on you, on a tribunal or on a court. Where guidance and the legislation differ, the legislation wins. HMRC can also change or withdraw guidance, and it may not cover your facts.
Where this is not settled
- Whether section 75A applies depends on the full chain of arrangements, payments and parties involved.
- It can be difficult to identify payments made through non-land steps and decide how they affect the amount for the notional transaction.
- The supplied statutory bundle is current only to 17 November 2025 and does not include the text of section 75A itself. The current statutory wording should be checked before publication.
Evidence you would need
This kind of case is decided on the facts of the individual property. These are the records that usually settle it, and the ones an adviser would ask you for.
- Contracts, transfers and completion statements for every step in the arrangement
- A diagram showing who held and received each property right
- Records of every payment, including payments under non-land agreements
- Details showing why the section 75A conditions are said to be met
Explore this with an AI
Readers often want to test their own situation. Copy the prompt below into ChatGPT, Claude or Gemini. It hands the model the actual legislation for this page rather than letting it answer from memory, and tells it to be explicit about what is uncertain. What comes back is information, not advice – check it against the links above.
I am researching UK Stamp Duty Land Tax (SDLT), which applies in England and Northern Ireland. MY QUESTION Section 75A SDLT: the notional transaction explained [Replace this with your own situation: what you are buying, the price, the dates, who the buyer is, and what you plan to do with the property.] THE LAW THIS TURNS ON - FA 2003 section 75A - conditions for the anti-avoidance rule to apply https://www.legislation.gov.uk/ukpga/2003/14/section/75A/2025-11-17 - FA 2003 section 75A - replacement of scheme steps with a notional sale https://www.legislation.gov.uk/ukpga/2003/14/section/75A/2025-11-17 - FA 2003 section 75A - amount used for the notional transaction https://www.legislation.gov.uk/ukpga/2003/14/section/75A/2025-11-17 - FA 2003 section 76 - time limit for filing a land transaction return https://www.legislation.gov.uk/ukpga/2003/14/section/76/2025-11-17 - FA 2003 section 76 - tax calculation required in a chargeable transaction return https://www.legislation.gov.uk/ukpga/2003/14/section/76/2025-11-17 - FA 2003 section 77 - notional section 75A transactions must be reported https://www.legislation.gov.uk/ukpga/2003/14/section/77/2025-11-17 Guidance page from HMRC on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09110 HOW I WANT YOU TO ANSWER 1. Work from the legislation above. Read it before answering. Guidance from HMRC is its view of the law, not the law, and does not bind a tribunal or a court. 2. Tell me what the rule actually requires, in plain English. 3. Tell me which facts decide the answer, and which facts would change it. 4. Tell me what evidence I would need to support the position. 5. Be explicit about anything unsettled or fact-sensitive. Do not guess. 6. Your training data has a cutoff and SDLT rates and reliefs change at fiscal events. Say so if you are not sure the law is current. POINTS ALREADY KNOWN TO BE UNCERTAIN ON THIS TOPIC - Whether section 75A applies depends on the full chain of arrangements, payments and parties involved. - It can be difficult to identify payments made through non-land steps and decide how they affect the amount for the notional transaction. - The supplied statutory bundle is current only to 17 November 2025 and does not include the text of section 75A itself. The current statutory wording should be checked before publication. Do not give me a conclusion you cannot support from the provisions above.
Legislation links show Finance Act 2003 as it stood on 2025-11-17. The law may have changed since, and the rules that apply are those in force on the date of your transaction. The official guidance this page is based on is here.
This page was last updated on 1 September 2026
Useful article? You may find it helpful to read the original guidance here: Section 75A SDLT: the notional transaction explained
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