Section 75A of the Finance Act 2003 lets HMRC ignore the actual steps in a property deal and instead charge Stamp Duty Land Tax on a single notional purchase by the person who ends up with the property (P) from the person who disposed of it (V), whenever the steps together produce less SDLT than that notional purchase would. It contains no motive test: the Supreme Court in Project Blue Ltd v HMRC [2018] UKSC 30 said it is enough that the series of transactions reduced the tax, whatever the parties’ reasons.

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What does section 75A do?

Section 75A applies where three conditions are met together (section 75A(1)):

  1. One person, V, disposes of a chargeable interest and another person, P, acquires it or an interest deriving from it.
  2. A number of transactions, including that disposal and acquisition, are involved in connection with it. These are the scheme transactions.
  3. The total SDLT payable on the scheme transactions is less than the SDLT that would be payable on a notional transaction in which P acquires V’s interest directly.

When it applies, section 75A(4) disregards any scheme transactions that are SDLT transactions and substitutes the notional purchase by P from V. HMRC’s guidance says P then has to file the return for the notional transaction and pay the tax (SDLTM09110). Sections 75A to 75C were inserted by the Finance Act 2007 and have effect for disposals and acquisitions after 2pm on 6 December 2006 (SDLTM09060).

What counts as a scheme transaction?

The net is wide. Section 75A(2) says a transaction includes a non SDLT transaction, an agreement or undertaking not to take some action, any kind of arrangement and a transaction that takes place after P’s acquisition. Section 75A(3) gives examples, including P taking a lease out of V’s freehold, a sub sale to a third person, and the grant, exercise, variation or waiver of a right to terminate a lease.

HMRC’s view, which it says the Project Blue decision supports, is that any transaction forming part of the context in which P acquires V’s interest is a scheme transaction (SDLTM09170). Being one of a sequence is not enough on its own, but a step without which the outcome could not be achieved, or steps that are commercially interdependent, are likely to be included. HMRC looks at the planning involved, the relationship of the step to the disposal and acquisition, how close together the steps are and the reasons for each (SDLTM09190).

Section 75C(1) gives one important exclusion. A transfer of existing shares or securities that would be the first scheme transaction is ignored, as are consecutive share transfers that come before any other step. The exclusion does not cover an issue of new shares (SDLTM09280).

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How is the notional transaction taxed?

Under section 75A(5) the chargeable consideration is the largest amount, or aggregate amount, given by or on behalf of any one person for the scheme transactions, or received by or on behalf of V or a person connected with V. Connection is tested under section 1122 of the Corporation Tax Act 2010 (SDLTM09220). Other rules then adjust the figure:

  • Incidental transactions. Section 75B excludes consideration for transactions that are merely incidental to the transfer from V to P, such as construction work, the sale of things other than property, or a mortgage or other finance for P. Consideration cannot be excluded for steps that are required for the transfer, form part of the process, are a condition of it, or are listed in section 75A(3) (SDLTM09250 and SDLTM09260).
  • Reliefs. Section 75C(2) allows any relief that would have been available had the notional transaction been real, subject to its normal conditions. HMRC’s example is group relief between V and P, which is still lost if there are arrangements for someone to obtain control of P (SDLTM09300). See SDLT group relief.
  • Exchanges. Section 75C(7) applies the exchange rules to the notional transaction (SDLTM09340).
  • Tax already paid. SDLT paid on disregarded transactions is treated as paid on the notional transaction, so only the extra is due (SDLTM09370).

Under section 75A(6) the effective date of the notional transaction is the last date of completion of the scheme transactions or, if earlier, the last date on which a contract in respect of them is substantially performed. See SDLT and substantial performance.

Does there need to be an intention to avoid tax?

No. HMRC’s guidance at SDLTM09090 notes that, unlike most targeted anti avoidance rules, section 75A has no main purpose test. It quotes Lord Hodge in Project Blue: it is sufficient for its operation that tax avoidance, in the sense of a reduced liability or no liability to SDLT, resulted from the series of transactions the parties put in place, whatever their motive. HMRC adds that section 75A can apply where the reduction in SDLT is an unintended consequence of the steps (SDLTM09170). That is why ordinary commercial restructurings involving property need to be checked against it.

How did the courts apply it in Project Blue?

The Upper Tribunal decision ([2014] UKUT 0564 (TCC)) records the facts. On 5 April 2007 the Secretary of State for Defence contracted to sell Chelsea Barracks to Project Blue Ltd for £959 million. Project Blue financed the purchase in a way that complied with sharia law: it sold the site on to a Qatari bank, Masraf al Rayan, for a dollar price then worth about £1.25 billion, and took a leaseback with put and call options for a later transfer back.

The Upper Tribunal accepted that, ignoring section 75A, neither Project Blue nor the bank paid SDLT. The sub sale rules as they then stood let Project Blue’s purchase be disregarded, while the bank’s purchase qualified for alternative finance relief. The Upper Tribunal described this as a flaw in the legislation. HMRC used section 75A to charge Project Blue.

The case reached the Supreme Court, where the key question was who P is when several parties could qualify. HMRC’s summary at SDLTM09160 is that the court rejected a step by step approach and took a purposive one: P is the person who obtained the tax benefit, or who would have been liable to the tax had the scheme transactions not been carried out. The specific gap has since been closed, because paragraph 16(5) of Schedule 2A now denies sub sale relief where the sub sale is exempt under the alternative finance rules. See SDLT on sub sales and transfers of rights.

When does section 75A not apply?

Section 75A(7) switches it off where the comparison test is met only because of the alternative finance reliefs in sections 71A to 73 or a provision of Schedule 9 (right to buy and shared ownership). HMRC notes it can still apply where one of those reliefs is combined with another relief (SDLTM09210). If the SDLT on the actual transactions is equal to or more than the SDLT on the notional transaction, the third condition fails and nothing changes (SDLTM09230).

HMRC’s published examples show where the line falls:

  • Buying a company and taking the properties out. An individual buys a company that has held three properties for years and then has them distributed to him, with nothing further planned. Section 75A is not engaged: the share purchase is ignored under section 75C(1), leaving only one relevant transaction (SDLTM09380).
  • Removing unwanted properties before a share sale. A company distributes ten properties to its parent so the buyer of its shares acquires only the five it wants. Section 75A does not apply to the distribution, because the share sale has no effect on those transactions (SDLTM09410).
  • Moving properties into a new company for sale. A group inserts a new holding company, distributes rental properties into it with no SDLT under the connected company rules, and then sells the new company to a buyer as always intended. Here section 75A does apply, because the steps are interdependent and the notional transaction produces more tax (SDLTM09430).

Can you get certainty from HMRC?

HMRC accepts non statutory clearance applications on section 75A at nonstatutoryclearanceteam.hmrc@hmrc.gov.uk. It will usually confirm whether a particular transaction is a scheme transaction, who V and P are, and the chargeable consideration for the notional transaction. It will not give clearance where it considers the transactions are undertaken to avoid tax, or where the application only asks whether section 75A applies (SDLTM09080).

How does it sit with other anti avoidance rules?

Section 75A is not the only weapon. The general anti abuse rule in Part 5 of the Finance Act 2013 applies to SDLT (section 206(3)(f)), and specific reliefs carry their own purpose tests, such as paragraph 18 of Schedule 2A for sub sales. See the general anti abuse rule and tax avoidance and tax evasion.

The practical lesson is to compare the SDLT on the real steps with the SDLT on a direct purchase by the final owner from the first seller. If the steps produce less, section 75A needs to be considered before completion, not after an enquiry opens. The ordinary rules on consideration are in SDLT chargeable consideration.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 24 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.