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Stamp duty exemptions and reliefs
Some transfers are outside the tax altogether and need no return; others are taxable but reduced by a relief that has to be claimed.
Checked by Radif Partners · Editorial policy · How we calculate
Four kinds of transfer carry no Stamp Duty Land Tax and need no return to HMRC: a gift for which nothing is paid and no debt is taken on, property left to you in a will, a transfer between spouses or civil partners on divorce or dissolution, and the purchase of a freehold for less than £40,000. The exemption depends on the absence of consideration, so a “gift” that comes with a mortgage is not exempt: taking over £180,000 of debt is taxed like a £180,000 purchase, £1,100 in England. Reliefs are different. First-time buyer relief, the reliefs that keep a company out of the 17% rate and the treatment of six or more dwellings as non-residential all reduce a tax that is otherwise due, and they only apply if the conveyancer claims them on the return within 14 days. Scotland and Wales tax the consideration in the same way and keep their own lists of exemptions and reliefs.
A gift that carries a mortgage: is it still exempt?
Stamp Duty Land Tax on the “gift”
£1,100
| Chargeable consideration (the debt) | £180,000 |
| If you keep another home | £10,100 |
| Same gift with no debt passing | £0 |
Taking over debt is consideration: the gift is taxed as a purchase at that price.
Exempt: no tax and no return
An exemption takes a transaction outside SDLT entirely. Nothing is paid, and HMRC does not expect a return. The common thread is the absence of chargeable consideration: no money, no debt assumed, nothing given in exchange. HMRC’s guidance on land and property transfers and its list of reliefs and exemptions set out the cases below.
| Transaction | SDLT due | Return needed |
|---|---|---|
| Gift with no money paid and no debt taken on | £0 | No |
| Property received under a will | £0 | No |
| Transfer between spouses or civil partners on divorce or dissolution | £0 | No |
| Freehold bought for less than £40,000 | £0 | No |
| Gift of a house with £180,000 of mortgage taken over | £1,100 | Yes |
Gifts
A parent who signs a flat over to a child, with nothing paid and no loan attached, makes an exempt transfer. The value of the flat does not matter. What breaks the exemption is consideration in any form, and the most common one is a mortgage. If the child becomes responsible for the loan, the amount taken over is treated as the price, and the transfer becomes an ordinary purchase at that figure, with the surcharge if the child keeps another home. The mini-simulator above shows the bill for the debt you enter.
Wills and inheritance
Property passing to a beneficiary under a will is exempt. The executors do not file an SDLT return to transfer it to you. The inheritance can still affect your next purchase, through the higher rates or through the loss of first-time buyer status, as the inherited property guide explains.
Divorce and dissolution
A transfer between spouses or civil partners as part of a divorce or dissolution is exempt, even when the receiving spouse takes over the whole mortgage. The exemption does not extend to unmarried couples. For them, any change of ownership is a transfer of equity taxed on the cash and the debt that move.
Cheap freeholds
Buying a freehold for less than £40,000 needs no tax and no return. That can cover a garage, a strip of garden or a parking space bought freehold at a modest price. Above the figure, the ordinary bands apply, and a cheap purchase may still carry no tax because it falls inside the nil band, with the return then left to your conveyancer to assess.
Family transfers that are not exempt
Being related to the other party is not an exemption in itself. Three situations catch families out. A parent who adds an adult child to the title of a mortgaged house, with the child becoming jointly liable for the loan, makes a taxable transfer: half of a £240,000 mortgage is a £120,000 consideration, inside the nil band of all three nations, though a larger loan would not be. A sale to a relative at a reduced price is taxed on the consideration, which is normally the price in the contract: selling a £350,000 house to a daughter for £200,000 costs her £1,500 as a first home at standard rates, or £0 if she qualifies as a first-time buyer. And a gift between partners who are not married is exempt only while no debt passes; once it does, there is no divorce exemption to fall back on.
Checking an exemption before completion
- List everything the recipient gives: cash, a promise to pay, a share of a loan, works carried out. Any of these is consideration.
- Check who the parties are. The divorce and dissolution exemption needs spouses or civil partners and a settlement or order.
- For a freehold bought cheaply, confirm that the price is genuinely below £40,000, with nothing else paid on the side for the same land.
- Keep the documents. An exempt transfer has no return, so the deed and the settlement are your evidence if the position is ever questioned.
Leases and the rent
A new residential lease is taxed on two elements: any premium paid for it, under the ordinary bands, and the rent, at 1% of the net present value of the rent above £125,000. A lease whose rent has a net present value below that threshold therefore pays nothing on the rent. The net present value is computed by your conveyancer from the rent and the term of the lease; this site does not compute it.
Reliefs: taxable, but reduced on a claim
A relief leaves the transaction inside the tax. The return is filed in the usual way and the relief is claimed on it, with the reduced tax paid within 14 days. A relief that is not claimed is not given, though a return can be amended within 12 months of its filing date.
| Relief | Who claims it | Effect at an example price |
|---|---|---|
| First-time buyer relief | Every buyer a first-time buyer, living there | £400,000: £5,000 instead of £10,000 |
| Relief from the 17% company rate | Rental business, developer, trader and other listed activities | £800,000: £70,000 instead of £136,000 |
| Six or more dwellings in one transaction | Any buyer | £1,200,000: £49,500 on the non-residential table |
First-time buyer relief is the most widely used, and its conditions are strict: every buyer must never have owned a home anywhere in the world, and must intend to live in the property (first-time buyer guide). The company reliefs keep a business that lets, develops or trades in property out of the flat 17% rate and on the higher rates instead (company purchases). Since multiple dwellings relief was abolished on 1 June 2024, buyers of six or more dwellings in a single transaction can be taxed on the non-residential table.
Some features of the rules look like reliefs but are not. The ordinary rates for a buyer replacing a main residence are simply the absence of the surcharge, and the refund for a late sale is a repayment of tax already paid. Neither is claimed as a relief on the original return.
Scotland and Wales
Land and Buildings Transaction Tax and Land Transaction Tax are both charged on the chargeable consideration, so a transfer for which nothing is paid and no debt is assumed produces no tax under either. Each nation has its own statutory list of exemptions and reliefs and its own rules on returns, which this site has not verified one by one. The points we have verified are these: Scotland’s first-time buyer relief raises the nil band to £175,000, worth up to £600; Wales has no first-time buyer relief, keeps a relief for multiple dwellings, and taxes companies at its higher rates. For anything else, check Revenue Scotland or the Welsh Revenue Authority before relying on an exemption.