Stamp Duty Group Relief: property transfers tax
When transferring property between two companies, you may be eligible for a reduced Stamp Duty rate called Group Relief. Companies must be part of the same group and meet special conditions. If your company paid a higher rate of Stamp Duty for a purchase that meets these criteria, you may be eligible for a refund.
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What is Stamp Duty Group Relief?
Companies that operate in the same group can transfer properties without paying Stamp Duty Land Tax (SLDT) with Group Relief. This allows associated companies to transfer land and buildings to set off a loss from one company to another.
What is the criteria for Group Relief?
All companies involved must be a body corporate
Companies must be associated bodies
(see below conditions)
All supporting evidence must be available
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Claiming Stamp Duty Group Relief
Your transfer may be eligible for Group Relief if there is a direct relationship between the two companies you want to transfer the property between, or if a third company is associated with the two companies and meets the required conditions for association.
HMRC requires the following conditions to be met for companies to be eligible for Group Relief:
- The first is the beneficial owner of not less than 75% of the ordinary share capital of the second, or a third body corporate is the beneficial owner of not less than 75% of the ordinary share capital of each.
- The first is beneficially entitled to not less than 75% of any profits available for distribution to equity holders of the second body.
- The first would be beneficially entitled to not less than 75% of any assets of the second available for distribution to its equity holders on a winding up.
Companies must also be considered a body corporate, which means they are either:
- Companies with limited or unlimited liability
- Companies limited by guarantee
- Charter companies
- Bodies created by statute
HMRC has a special application process for Group Relief. The only way to apply is to email a claim directly to HMRC. This is then submitted for formal adjudication under section 12 of the Stamp Act 1891. Applications can also be made via post.
When making a claim to HMRC for Group Relief, the following documentation must be supplied:
- An electronic letter of the claim (with all required information) signed by approved individuals
- An electronic copy of your stock transfer form or other instrument of transfer
- A list of shareholders and the shares they hold for each company
- A copy of the latest accounts of the transferee company if the consideration was provided from cash resources
- Copies of any agreement with a third party relating to the provision of consideration
- Copies of correspondence, agreements, board minutes or any other writings
- All relevant supporting evidence
Original copies must not be sent by post, as HMRC does not retain or return submissions once received.
Think you might be eligible for Group Relief? Get a quick assessment from our expert team.
You must submit a Group Relief claim for SLDT within 30 days of the transfer date.
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Group Relief examples
01
Example 1:
Company A owns 75% of the ordinary share of Company B.
The two companies can transfer the property between each other and apply for Group Relief, paying no Stamp Duty.
02
Example 2:
Company C owns 75% of the share capital of both Company A and Company B.
Company C can transfer the property between Company A and Company C without paying any Stamp Duty, even if Company A and Company B do not own at least 75% of each other’s ordinary share capital.
03
Example 3:
Company A is entitled to at least 75% of Company B’s profits available for distribution to equity holders of Company B.
Company A and B can transfer property between the other without paying Stamp Duty.
Are you owed thousands in Stamp Duty?
How much Stamp Duty will I pay if I’m eligible for Group Relief?
When your company is eligible for Stamp Duty Group Relief, no Stamp Duty is required to be paid, regardless of the property(s) value.
Should your application for Group Relief be rejected by HMRC, you’ll need to pay the full amount of Stamp Duty. If you aren’t eligible for Group Relief, you could still potentially get a Stamp Duty refund under another relief.
Get in touch today to find out what you might be owed.
Commonly asked questions about Group Relief
Group Relief is a Stamp Duty exemption that companies can apply for when transferring land, buildings, and property between companies that are associated with each other. When Group Relief is approved by HMRC, no Stamp Duty is required to be paid for these transactions. All companies involved in the transfer must meet the eligibility criteria to get Group Relief.
Should an application for Group Relief be rejected, Stamp Duty must be paid as per the transaction type.
Companies can be exempt from paying Stamp Duty Land Tax (SDLT) when transferring assets between the companies if they are part of the same group. This means Stamp Duty does not have to be paid. Certain conditions must be met in terms of how much ordinary share capital is owned by each company to be eligible for an exemption in SDLT.
Group Relief must be applied for within 30 days of the transfer being finalised. Failure to do this could result in a fine from HMRC, plus the Stamp Duty payment for the transaction.
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Paul EdwardsI reached out to StampDuty.com in August to discuss a purchase I made last year.
The property was in a bad state of repair, lots needed doing. When StampDuty.com gathered the documents and images of the property, they let me know I could save roughly £40,000. This seemed amazing but i was sceptical, why didn't my lawyer point this out. After many reassuring conversations and pointing to legislation to explain their answers, we pushed ahead.
I am pleased to say I received my refund at the end of October! I just want to thank Joe and the team for all of their hard work and the fast turnaround.