Stamp Duty when transferring the ‘whole business’ of a Partnership into a Limited Company

Stamp Duty when transferring the ‘whole business’ of a Partnership into a Limited Company

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Stamp Duty Land Tax “SDLT” is not payable when a family-owned business partnership transfers its ‘whole business’ to a company at the point of incorporation, nor is a return needed. This also applies to non-family partnerships where the partners retain joint control of their new company. The legislation is FA2003/sch15 as amended by FA2004/Sch41

In Scotland, the applicable legislation is Land and Buildings Transaction Tax (Scotland) Act 2013 Schedule 17.

The Partnership Act 1890 Act describes a partnership as ….

‘the relation which subsists between persons carrying on a business in common with a view of profit.”

Please see  https://www.legislation.gov.uk/ukpga/Vict/53-54/39/section/1

Further tests as to whether you are running a Partnership are:-

  1. Is there a business? A Partnership cannot exist based purely on Joint Ownership. A business must also exist.
  2. Do the owners of the business share income, expenses, profits, losses and risks?
  3. Are the co-owners ‘co-adventurers in business’?

According to case law, the factors that point to the activities involved being broadly what you would expect in a business are:

  • Is there a “serious undertaking earnestly pursued” or a “serious occupation”
  • Is there an occupation or function actively pursued with reasonable or recognisable continuity?
  • Is there a certain amount of substance in terms of turnover?
  • Are the activities conducted in a regular manner and on sound and recognised business principles?
  • Are they of a kind which, subject to differences of detail, are commonly made by those who seek to profit by them

Landlord Tax Planning Consultancy is the core business activity of Property118 Limited (in association with Cotswold Barristers)

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There will never be an optimal ‘one-size-fits-all’ business structure for tax purposes. The presentation below provides a useful overview of some of the options you might like to discuss with us.



Landlord incorporation and tax planning presentation

Landlord incorporation and tax planning presentation

Incorporation relief and latent gains explained

Incorporation relief and latent gains explained

Incorporating your property portfolio without having to refinance

Incorporating your property portfolio without having to refinance

Capital Account Restructure – Case Study

Capital Account Restructure – Case Study

Software to analyse the viability of transferring a property rental business into a Limited Company

Software to analyse the viability of transferring a property rental business into a Limited Company

Inheritance tax and legacy planning for property company owners

Inheritance tax and legacy planning for property company owners

HMRC Internal Manuals ‘Landlord Incorporation’

HMRC Internal Manuals ‘Landlord Incorporation’

On-demand webinar explaining the uses of Limited Liability Partnerships “LLP’s” for landlord tax planning

On-demand webinar explaining the uses of Limited Liability Partnerships “LLP’s” for landlord tax planning

Guide for landlords on forming an LLP for property investment

Guide for landlords on forming an LLP for property investment

LLP structure reduces landlords tax bill by 85% – CASE STUDY

LLP structure reduces landlords tax bill by 85% – CASE STUDY

Partnership taxation and associated rules

Partnership taxation and associated rules

Business continuity and succession planning for landlords

Business continuity and succession planning for landlords

Property valuations for tax planning purposes cost just £19.95 each

Property valuations for tax planning purposes cost just £19.95 each

Hybrid Tax Structure – Landlords BEWARE!

Hybrid Tax Structure – Landlords BEWARE!

Tax Planning Bodge Jobs – Limited Liability Partnerships “LLP’s”

Tax Planning Bodge Jobs – Limited Liability Partnerships “LLP’s”

Landlords Tax Planning Bodge Jobs – inter company lending

Landlords Tax Planning Bodge Jobs – inter company lending

A Landlord’s Tax Planning Disaster

A Landlord’s Tax Planning Disaster

Just say NO to tax avoidance “schemes”

Just say NO to tax avoidance “schemes”