HMRC have announced a change of view in relation to Limited Liability Partnerships (LLP) within groups for SDLT and confirmation of their position in relation to Stamp Duty and other forms of partnership.

Following legal advice, HMRC now accepts that, for the purposes of SDLT group relief, a ‘body corporate’ does include an LLP. An LLP can therefore be the parent in a group structure. However, as an LLP does not itself have issued ordinary share capital it cannot be the subsidiary of other companies. This also means that any subsidiaries of the LLP cannot be grouped with the companies that are the corporate members of the LLP.

This revised view does not affect which party can claim group relief, but does affect which entities are regarded as forming part of a group. An LLP cannot claim group relief itself because its chargeable interests in land are treated as held by or on behalf of the individual members (Paragraph 2 Schedule 15 FA 2003), and this position is unchanged.

As such, in broad terms, an LLP continues to be disregarded if it is the vendor or purchaser in a transaction. In such a transaction group relief may be, in part at least, available if some or all of its members (which are incorporated companies) are themselves grouped.

It also follows that if an LLP transfers land to a company that it owns, and that is within the LLP headed group, no group relief will be available as the land is deemed to be owned by the members of the LLP, and those members are not within the same group as the company owned by the LLP.

If SDLT group relief has been incorrectly claimed solely as a result of an LLP in the group structure being disregarded or looked through for the purposes of establishing group relationships then HMRC have stated that they will not seek to revisit the claim.

For more information go to http://www.hmrc.gov.uk/so/group-rel-sdlt-sd.htm