UK proposes tighter SDLT group-relief withdrawal after winding-up

Group relief under Part 1 of Schedule 7 to the Finance Act 2003 can exempt a land transfer between qualifying group companies. Paragraph 3 provides for withdrawal where the purchaser leaves the vendor’s group within three years, or under relevant arrangements made within that period, subject to the statutory property-interest conditions. The current paragraph 4 winding-up exception can prevent withdrawal when the vendor, or a company above it, is wound up.^[1][3]

The draft would remove that winding-up exception from paragraph 4 and place it within paragraph 4ZA. That would bring it within the existing change-of-control mechanism: a later change in control of the purchaser can trigger withdrawal as though the purchaser had then left the group. This is a targeted change to the exception, not abolition of group relief or a new general property-tax rate.^[2][3]

The proposed amendments would apply to land transactions whose effective date falls on or after 29 October 2026. An earlier contract would remain protected unless an exclusion applies. Protection would be lost following a variation or assignment of contractual rights on or after that date, exercise of an option or similar right, or an assignment, subsale or other relevant transaction giving another person the right to call for a conveyance.^[2]

Groups planning property reorganisations should identify the original relief claim, transaction and contract dates, winding-up steps and subsequent control changes. The material is draft legislation, not evidence of completed enactment. Potential withdrawal depends on the precise statutory conditions; neither UK presence nor an intragroup transfer alone establishes an additional liability.^[2][3]