What are the SDLT consequences of a transfer to an LLP for no consideration?

“My client bought 2 commercial properties some time ago. They have been used by his business. The business is an LLP and he is a partner/director of the LLP along with 2 others his son and another non family member. My client has 51% of the business. My client is well past retirement age but is unlikely to retire from the business.

I have been asked to transfer the properties to the LLP for nil consideration but the accountants say there will be an SDLT charge on the transfer. They say this will be based on the aggregated value of the properties but restricted to the amount of the non-family members profit sharing % as the son is a linked person.

I have always treated transfers for nil consideration as SDLT exempt but I usually only deal with residential property so wonder if there is something special for commercial cases.”

Source: BLG Member


The accountants are correct. The rules are complex but, in essence, where a chargeable interest is transferred to a partnership there can be a charge to SDLT even if there is no consideration. The charge is on the market value of the share of that interest which is, in effect, acquired by partners who are not ‘connected with’ the transferor within the meaning of section 1122 CTA 2010 (with certain modifications).

At the time of publication this response was correct however as tax legislation and practice change from time-to-time you should take specific advice before taking any action.

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