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Problematic connections

02 December 2014 / Marc Selby
Issue: 4480 / Categories: Comment & Analysis , Ramsay , SDLT , Investments , Land & property

Beware the ramifications of property transactions between connected parties


  • A market value charge usually arises where a company acquires a property from a connected person.
  • Modified market value rules apply for certain partnership transactions.
  • Stamp duty land tax implications of sub-sales between connected parties.
  • Inter-group rental arrangements must be documented.

Property transactions between or involving connected parties can be problematic. Unexpected stamp duty land tax (SDLT) liabilities can arise from a failure to document such transactions as well as unfamiliarity with the rules. This article focuses on certain categories of connected party transactions that can cause problems.

Corporation Tax Act 2010 s 1122 determines whether parties are “connected” for SDLT. The provision as supplemented by CTA 2010 s 1123 which incorporates the tests for “control” in CTA 2010 s 450 and s 451 is tortuous and...

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