Company Share Purchase vs Property Asset Deal: SDLT Guide
Buying shares in a property-holding company attracts only 0.5% stamp duty on the share consideration. Buying the property directly as a company attracts 17% SDLT on a dwelling above £500,000 unless a relief applies. A company buying to let to unconnected tenants normally qualifies for property rental business relief and pays the standard rates plus the 5% higher rates instead. The gap on a £2 million purchase is £243,750 to £330,000, but anti-avoidance rules under s75A FA 2003 catch arrangements where the property is moved into a company so the shares can be sold.
Last verified: 29 September 2026
Key Takeaways
- •Share deals attract 0.5% stamp duty on the shares, not SDLT on the property (which is up to 17% for a company with no relief)
- •Companies buying a dwelling above £500,000 pay 17% SDLT unless a Schedule 4A relief applies (the rate rose from 15% on 31 October 2024)
- •Section 75A FA 2003 (the SDLT-specific anti-avoidance rule) can catch arrangements where property is moved into a company and the shares are then sold; a plain sale of an existing company's shares is protected by s75C(1)
- •Schedule 4A reliefs cover property rental businesses, development and trading, public-access trades, lenders, employee and caretaker accommodation, farmhouses and housing co-operatives
- •SDLT surcharges can stack: 17% rate applies alongside the 2% non-resident surcharge for overseas companies
Share Deal vs Asset Deal: The Core Difference
When a property is held by a company, there are two ways to acquire it. In an asset deal, the buyer purchases the property directly from the company. SDLT is payable on the property consideration at the relevant residential or commercial rates. In a share deal, the buyer purchases the shares in the company that owns the property. Stamp duty (not SDLT) is payable on the share consideration at a flat 0.5% rate.
This distinction has profound tax consequences. Stamp duty on shares is one of the simplest taxes in the UK: 0.5% on the chargeable consideration, rounded up to the nearest £5. There are no thresholds, no surcharges, and no banding. SDLT on residential property is far more complex, with progressive bands, surcharges for companies and non-residents, and anti-avoidance provisions.
| Feature | Asset Deal (SDLT) | Share Deal (Stamp Duty) |
|---|---|---|
| Tax base | Property consideration | Share consideration |
| Rate (residential >£500k) | 17%, or standard + 5% with relief | 0.5% |
| Rate (commercial) | 0%/2%/5% bands | 0.5% |
| Surcharges | Yes (company, non-resident) | None |
| HMRC return required | Yes, within 14 days | Via CREST/stock transfer |
| Anti-avoidance risk | Lower | High if wrapped for tax |
| ATED obligation | Potentially (post-purchase) | Inherits from company |
Stamp Duty Comparison: 0.5% vs 17%
The 17% rate for companies buying residential property worth over £500,000 was introduced in the Autumn Budget 2024, increasing from the previous 15% rate. Where it applies, it is charged on the entire purchase price (not just the amount above £500,000) as a flat rate. Most companies buying to let, develop or trade qualify for a Schedule 4A relief, in which case they pay the standard rates plus the 5% higher rates instead.
How the 17% rate works
The 17% rate under Schedule 4A FA2003 applies to high-value residential transactions where the purchaser is a company. It is a single flat rate applied to the entire consideration, not a banded calculation. A company paying £500,001 for a residential property pays £85,000.17 in SDLT, compared with a private buyer paying approximately £15,000. The rate applies to UK and overseas companies alike unless a relief applies or the company is acting as trustee of a settlement (non-UK resident companies additionally face the 2% non-resident surcharge).
| Purchase Price | Private Buyer (standard) | Company, no relief (17%) | Company with rental relief | Share Deal (0.5%) |
|---|---|---|---|---|
| £500,000 | £15,000 | £40,000 | £40,000 | £2,500 |
| £750,000 | £27,500 | £127,500 | £65,000 | £3,750 |
| £1,000,000 | £43,750 | £170,000 | £93,750 | £5,000 |
| £2,000,000 | £153,750 | £340,000 | £253,750 | £10,000 |
| £5,000,000 | £513,750 | £850,000 | £763,750 | £25,000 |
Share deal cost is 0.5% stamp duty on shares. Private buyer uses standard residential bands (post April 2025). The 17% flat company rate applies only above £500,000 and only where no relief applies, so at exactly £500,000, or with a relief such as property rental business relief, a company pays the standard bands plus the 5% higher rates.
Worked Example: £2M Property
Consider a £2 million London residential property held by a special purpose vehicle (SPV) company. A commercial investor is acquiring the property.
Asset Deal (buy the property)
SDLT return due within 14 days of completion. Also triggers ATED review obligation.
Share Deal (buy the company)
Exposed to s75A if the property was moved into the company as part of the same arrangement.
The lower figure applies where the buying company would qualify for property rental business relief, the higher where it would not. The saving is real where the company already owned the property: a plain sale of its shares is ignored for s75A because it is the first step (s75C(1)). If instead the property was transferred into the company as part of the same arrangement and the shares were then sold, s75A can impose SDLT as if a direct purchase had taken place.
Anti-Avoidance: Section 75A FA 2003
Section 75A Finance Act 2003 is the SDLT-specific anti-avoidance rule that targets arrangements where a series of transactions (including transferring property into a company and then selling shares) achieves the same result as a direct land transaction but with less SDLT. Where s75A applies, the scheme transactions are disregarded and SDLT is charged on a single notional land transaction. The section itself contains no purpose test: it compares the SDLT actually paid with the SDLT on a direct acquisition.
When s75A applies
- •Wrapping as part of the deal: Property is transferred into a company as a step in the arrangement and the shares are then sold, so the share sale is not the first scheme transaction
- •Less SDLT than a direct purchase: The total SDLT on the scheme transactions is less than on a notional direct acquisition of the land
- •Not a plain share sale: A transfer of shares is ignored for s75A where it would be the first of the scheme transactions (s75C(1)), so selling an existing property company is not caught on its own
The General Anti-Abuse Rule (GAAR) also applies to stamp taxes from 2013 onwards. HMRC has actively litigated a number of share-purchase arrangements designed to avoid SDLT and has generally succeeded where the structure was artificial. The disclosure of tax avoidance schemes (DOTAS) regime requires notification of SDLT avoidance schemes within 5 days of making them available.
Protection for existing company structures
Where the company already owned the property before the arrangement began, a straightforward sale of its shares is ignored for s75A because it would be the first scheme transaction (s75C(1)). The purchaser is acquiring a company that happens to own property, not a wrapper created for the sale.
Buying through a company? The rates are different
Companies pay the 5% surcharge on homes, and a flat 17% above £500,000 unless a relief applies.
Reliefs from the 17% SDLT Rate
Schedule 4A FA2003 disapplies the 17% corporate rate in several cases. Where a relief applies, the company pays the standard rates plus the 5% higher rates instead. The three most common are described below; the others cover trades that open the dwelling to the public, financial institutions acquiring in the course of lending, caretaker flats bought by management companies, farmhouses and qualifying housing co-operatives. A company acting as trustee of a settlement is outside the 17% rate altogether. Most reliefs can be withdrawn (clawed back) if the qualifying conditions are breached within three years.
1. Property Rental Business Relief
Available where the company intends to exploit the property as a source of rents in the course of a property rental business. The property must not be occupied by a participator (shareholder) or an associate. Clawback applies if the property ceases to be held for rental within 3 years. This is the most commonly used relief for institutional landlords and property investment companies.
2. Property Developer Relief
Available where the company acquires the property for development or redevelopment and resale in the course of a property development trade, or for resale in the course of a property trading business. Development or redevelopment followed by letting in a qualifying property rental business also qualifies.
3. Employee-Occupied Property Relief
Available where the property is acquired to be made available as living accommodation to qualifying employees or partners, for purposes that are solely or mainly those of a trade or property rental business run commercially. This relief is narrow and typically applies to employer-provided accommodation in genuine employment contexts, not to buy-to-let or director accommodation.
Surcharge Stacking for Companies
When a company buys UK residential property directly (asset deal), multiple SDLT surcharges can stack. A UK company pays 17%. An overseas company adds the 2% non-resident surcharge on top, producing a combined rate that exceeds the headline figures.
How surcharges combine
The 17% flat rate replaces the banded rates and the 5% higher rates (it is pitched at the 12% top band plus 5%). The 2% non-resident surcharge is then added on top of the 17% rate for a non-UK resident company, producing a 19% rate on the total consideration. A company that qualifies for a relief pays the banded rates plus 5%, plus 2% if it is not UK resident. See our Foreign Company UK Property guide for the full surcharge stacking analysis including ATED.
Frequently Asked Questions
Is it cheaper to buy shares in a property company than the property itself?
On the face of it, yes: 0.5% stamp duty on the shares versus SDLT on the property. A company buying a £2 million property with no relief pays 17%, so the share deal saves £330,000; a company that qualifies for property rental business relief pays £253,750 on the property instead, so the saving is £243,750. However, the buyer inherits all the company's liabilities, latent CGT, potential ATED arrears, and deferred tax, so the net saving is usually far smaller after due diligence adjustments to the share price. And if the property was moved into the company as part of the same arrangement, s75A FA 2003 can charge SDLT as if it had been bought directly.
What is the 17% stamp duty rate for companies?
The 17% rate applies under Schedule 4A FA2003 when a company or other corporate body acquires a dwelling for more than £500,000 and no relief applies. It increased from 15% on 31 October 2024. A company acting as trustee of a settlement is outside it, and reliefs such as property rental business relief take the company back to the standard rates plus the 5% higher rates. Below £500,000, companies pay the standard rates plus the 5% higher rates. The 17% rate is a flat rate on the total consideration, not a banded calculation.
Can a company claim relief from the 17% SDLT rate?
Yes. Schedule 4A disapplies the 17% rate in several cases. The main ones are a property rental business, property development or trading (including redeveloping and then letting), trades that open the dwelling to the public, financial institutions acquiring in the course of lending, dwellings for qualifying employees or partners of the business, caretaker flats bought by management companies, farmhouses, and qualifying housing co-operatives. Most carry a 3-year withdrawal period, and relief must be claimed in the SDLT return. Where relief applies, the company pays the standard rates plus the 5% higher rates.
Will HMRC challenge a share deal to avoid stamp duty?
Section 75A FA 2003 is the SDLT anti-avoidance rule. It applies where a series of transactions results in less SDLT than a direct purchase of the land would, and the section itself contains no purpose test. A plain sale of shares in a company that already owned the property is not caught: s75C(1) says a share transfer is ignored for s75A where it would be the first of the scheme transactions. The risk arises where the property is moved into a company as part of the arrangement and the shares are then sold. The General Anti-Abuse Rule (GAAR) can also apply to abusive arrangements.
Reviewed by
Julie White
ACAStamp duty specialist since 1999Stamp Duty Land Tax Specialist
ACA and Tax Adviser with a career spanning nearly four decades, specialising in stamp duty planning and advisory work since 1999.