Linked Transactions 

Chapter Summary: This chapter discusses the significant changes in Stamp Duty Land Tax (SDLT) for linked transactions, particularly the abolition of Multiple Dwellings Relief (MDR) starting June 1, 2024, and its impact on property investors.

Key Points:

  • Linked transactions involve multiple property deals between connected parties, considered as one for SDLT purposes.
  • The abolition of MDR means higher SDLT liabilities for investors buying multiple properties as they can no longer reduce their tax by treating each property separately.
  • Section 55 of the Finance Act 2003 is important for understanding how SDLT is calculated for linked transactions, emphasising the aggregation of transaction values.

Main Principles: The main principles include ensuring tax fairness by preventing tax avoidance through property splitting and reflecting the total economic value of property transactions in the tax system. These changes encourage careful planning and understanding of potential tax liabilities in property investments.

Linked Transactions Overview

(Linked Transactions Overview)

From June 1, 2024, property investors can no longer use Multiple Dwellings Relief to reduce stamp duty on linked transactions, where multiple property deals with connected parties are taxed based on their combined value.

Important Update: Effective June 1, 2024, Multiple Dwellings Relief (MDR) will no longer be available for Stamp Duty Land Tax (SDLT). This change will significantly impact property investors, particularly those involved in linked transactions.

Linked transactions refer to multiple property deals between the same buyer and seller, or their connected parties, treated as a single arrangement or a series of transactions. The significance of linked transactions lies in their impact on the total SDLT liability. Instead of assessing each transaction individually, the total value of all linked transactions is combined to determine the SDLT owed. This can substantially increase the amount of tax payable compared to treating each transaction separately.

Legislative Framework

The concept of linked transactions is embedded in the Finance Act 2003. According to Section 108 of the Acttransactions are considered linked if they form part of a single arrangement or scheme. This includes scenarios where properties are sold in stages or where multiple properties are sold within a short time frame, even if there are separate contracts.

Key Characteristics of Linked Transactions

  1. Same Buyer and Seller: Transactions between the same buyer and seller are automatically scrutinised for potential linking.
  2. Connected Parties: Transactions involving connected parties (e.g., family members, associated companies) can also be considered linked.
  3. Single Arrangement: Even if there are multiple contracts, if the transactions are part of a single arrangement, they are treated as linked.
  4. Cumulative Value: The SDLT is calculated based on the total cumulative value of all linked transactions, which can push the combined value into higher SDLT rate bands.

Linked Transactions: Connected Parties

(Linked Transactions>Linked Transactions Overview)

➤ Linked transactions involve connected parties like family members or companies with shared ownership, affecting SDLT calculations.

Understanding whether transactions are linked often hinges on the relationship between the parties involved. The concept of “connected parties” is critical and defined by tax legislation. Connected parties include:

  • Family Members: This typically encompasses immediate family members such as spouses, children, and parents. It may also extend to siblings and other relatives, depending on the specific legal context.
  • Companies with Shared Ownership: If two or more companies are under common control or ownership, transactions between them can be considered linked. This includes scenarios where a single individual or a group of individuals controls both companies.

Legal Definitions and Implications

The definitions of connected parties are outlined in specific sections of tax legislation, particularly in the Finance Act 2003 and related guidance from HMRC. The key points to understand include:

  1. Control and Influence: If one party has control or significant influence over another, transactions between them may be considered linked. This includes scenarios where an individual owns shares in both companies involved in the transactions.
  2. Family Connections: Transactions between family members are often scrutinised to determine if they should be considered linked. This ensures that SDLT is applied correctly and prevents tax avoidance through fragmented transactions.

Practical Scenarios

Understanding these definitions helps in recognising linked transactions. Here are some practical examples:

  1. Example 1: Family-Owned Businesses
    • John owns Company A and his sister Mary owns Company B. If both companies are involved in a property transaction, HMRC may consider it a linked transaction due to the family connection.
  2. Example 2: Shared Ownership
    • A property developer owns multiple companies. If these companies engage in property transactions with each other, the transactions are likely linked due to the shared ownership and control.
  3. Example 3: Sequential Purchases
    • If a buyer purchases multiple properties from the same seller within a short time frame, these transactions may be considered linked, especially if there is a clear intent to fragment the purchase to minimise SDLT.

Legal References

For detailed legal definitions and guidelines, the following sections of the Finance Act 2003 are particularly relevant:

  • Section 108: Defines connected persons and the conditions under which transactions are considered linked.
  • Section 55: Discusses SDLT rates and how they apply to linked transactions.
  • HMRC Manuals and Guidance: Additional practical guidance can be found in the HMRC SDLT manual, which provides examples and clarifications on how linked transactions are assessed.

Linked Transactions: Single Arrangement

(Linked Transactions>Linked Transactions Overview)

➤ Linked transactions are treated as one for SDLT if they share a unified intent, involve the same parties, occur close in time, and are interdependent.

Linked transactions are generally understood to be transactions that are connected in some way, usually involving the same parties and occurring within a short time frame. A key aspect of identifying linked transactions is understanding the principle of a single arrangement.

Single Arrangement Explained

Single Arrangement: Even if there are multiple contracts involved, if these transactions are part of a single overarching arrangement, they are treated as linked for SDLT purposes.

Key Points:

  1. Unified Intent:
    • Transactions are considered linked if they collectively fulfil a single, unified intent. This means that even if different contracts are executed for each property or part of the transaction, if the overall intention is to achieve a singular objective, the transactions will be treated as linked.
  2. Same Parties:
    • The transactions typically involve the same buyer and seller, indicating a coordinated effort to complete a larger deal. The involvement of the same parties across multiple contracts strongly suggests that the transactions are linked.
  3. Proximity in Time:
    • The timing of the transactions is another critical factor. Transactions that occur within a short time frame are more likely to be considered linked. This is because the proximity in time implies that the transactions are components of a pre-arranged plan.
  4. Interdependence:
    • The interdependence of the transactions is evaluated. If the completion of one transaction is dependent on the completion of another, they are likely linked. This mutual dependency highlights the existence of a single arrangement.


  • Example 1: Property Portfolio Purchase
    • A company buys five properties from the same seller over the course of six months. Each property is under a separate contract. However, the intention is to acquire an entire portfolio, making the transactions part of a single arrangement.
  • Example 2: Residential Development
    • An individual purchases adjacent plots of land from different owners to develop a residential complex. Each plot has its own contract, but the purchases are interdependent and aimed at completing the development project.

Impact of MDR Abolition on Linked Transactions

(Linked Transactions)

➤ The abolition of Multiple Dwellings Relief increases SDLT costs for property investors, pushing them to reconsider transaction structures and strategies.

With the abolition of Multiple Dwellings Relief (MDR), property investors are facing substantial Stamp Duty Land Tax (SDLT) liabilities, which significantly impacts their investment strategies. The removal of MDR makes it more challenging to mitigate SDLT liability, pushing investors to reconsider their transaction structures.

Linked Transactions vs. Separate Transactions

Linked Transactions

  • Aggregation of Values: When transactions are linked, the total value of all properties is combined to calculate SDLT, often resulting in higher tax liability due to higher rate bands.
  • Substantial SDLT: Without MDR, linked transactions can lead to significant SDLT bills, as investors can no longer benefit from the relief that previously reduced the overall tax burden.

Separate Transactions

  • Potential for Lower SDLT: Treating each property purchase as a separate transaction can sometimes lower SDLT liability, as each property’s value is assessed independently.

Impact on Property Strategy

Given the increased SDLT liabilities due to the abolition of MDR, investors might need to adjust their strategies:

Avoid Transactions with Fewer than Six Residential Properties

  • Why: SDLT rates increase substantially with the total value of the transaction. Linked transactions without MDR can push the combined value into higher SDLT rate bands, resulting in a higher tax burden.
  • Alternative: Consider structuring deals to include six or more residential properties. Transactions involving six or more dwellings might qualify for non-residential rates under certain conditions, potentially reducing the overall SDLT liability.

Explore Mixed-Use Transactions

  • Benefit: Mixed-use properties, which combine residential and non-residential elements, are treated as non-residential for SDLT purposes. This can result in lower SDLT rates for the entire transaction.
  • Example: A building with commercial space on the ground floor and residential units above can be classified as mixed-use. Consequently, the entire transaction would attract non-residential SDLT rates, which are typically lower than residential rates.

Assess Property Condition

  • Non-Residential Classification: If a property is assessed as non-residential due to its condition, it can impact the SDLT treatment of linked transactions. If a property is deemed uninhabitable or not suitable for residential use, it may qualify as non-residential.
  • Mixed-Use Argument: When linked transactions involve properties assessed as non-residential, it is arguable that the entire transaction should be considered mixed-use. Therefore, the whole transaction could be subject to non-residential SDLT rates, potentially reducing the tax liability.

Scenario: Purchase of 5 Properties, Total Value £1,250,000

Let’s examine the Stamp Duty Land Tax (SDLT) liability for a linked transaction involving the purchase of five properties for a total value of £1,250,000 under different scenarios: standard residential rates, the now-abolished multiple dwellings relief, and as a mixed-use transaction with the first property being non-residential.

Scenario 1: Standard Residential Rates with Higher Rate SDLT


  • Total Value of Properties: £1,250,000
  • Buyer: Limited company (subject to a 3% higher rate)

SDLT Liability Calculation:

  • Total SDLT: £103,750

Explanation: In a standard linked transaction, all properties are considered together. The total value is subject to the residential SDLT rates plus an additional 3% higher rate due to the purchase being made by a limited company.

Scenario 2: Multiple Dwellings Relief (MDR) – Now Abolished

Hypothetical SDLT Liability if MDR were Available:

  • Total SDLT: £37,500

Explanation: MDR allowed SDLT to be calculated based on the average value of the properties, which significantly reduced the overall tax liability. However, since MDR has been abolished, this relief is no longer available.

Scenario 3: Mixed-Use Transaction

Assumption: The first property is non-residential, making the entire transaction mixed-use.

SDLT Rates for Mixed-Use Property:

  • Up to £150,000: 0%
  • Next £100,000 (portion from £150,001 to £250,000): 2%
  • Above £250,000: 5%
  • Additional 3% surcharge for company purchases

SDLT Liability Calculation:

  • Total SDLT: £89,500

Explanation: For mixed-use transactions, non-residential rates apply, which are generally lower than residential rates. This classification leads to significant SDLT savings. However, the 3% higher rate surcharge for company purchases still applies.

Summary of SDLT Liability

  • Standard Residential Rates: £103,750
  • With MDR (if it were available): £37,500
  • Mixed-Use Transaction: £89,500


The abolition of Multiple Dwellings Relief (MDR) significantly increases SDLT liabilities for property investors in linked transactions. However, classifying a transaction as mixed-use can still offer substantial SDLT savings compared to standard residential rates.

Buying Multiple Properties at Auction: Linked Transactions?

(Linked Transactions)

Buying multiple properties from the same seller at an auction does not automatically link the transactions for SDLT purposes due to each bid being considered a separate transaction.

A common misconception among investors is thinking that buying several properties from the same seller at an auction automatically links the transactions for SDLT purposes. However, the nature of auctions changes this assumption significantly.

The Misconception Explained

Imagine “Charlie,” an investor, attends an auction and successfully bids on three different properties, all being sold by “Alex.” Charlie might initially think that because he’s buying all three from Alex at the same event, the transactions are linked, potentially raising his SDLT bill due to the aggregated value of the properties.

Linked Transactions and Auctions

The key factor distinguishing auction purchases from other types of property transactions is the bidding process itself. Each bid at an auction is considered a separate transaction because each property is won through its own independent bidding process. This individual consideration of properties means that, in the eyes of the tax law, Charlie’s purchases are not necessarily linked just because they happen at the same auction and involve the same seller.

The Attorney General v Cohen Case

This principle was clearly illustrated in the landmark court case Attorney General v Cohen in 1936. In this case, a purchaser bought several properties from the same vendor at an auction. The court decided that these purchases were not linked transactions for SDLT purposes. 

The reason? Each property was acquired through a separate bidding process. Essentially, the court looked at the auction’s competitive nature, where each bid is independent and contingent on outbidding others, as evidence that each purchase was a standalone transaction.

Implications for Property Investors

This ruling is significant for property investors for a couple of reasons:

  1. Independent Transactions: When you buy multiple properties at an auction, even from the same seller, each purchase is treated as an independent transaction for SDLT purposes. This can affect your overall SDLT calculation and potentially lower the tax burden compared to what it would be if the transactions were considered linked.
  2. SDLT Planning: Understanding that auction purchases are not automatically linked allows for more accurate financial planning. Knowing how SDLT applies to your auction purchases can help you better estimate the total cost of your investment.

For property investors attending auctions, this distinction offers a clearer perspective on how SDLT might apply to their purchases. While the process might seem complex, recognising the independence of auction transactions can lead to more strategic and informed bidding, ultimately affecting the success and profitability of your property investments.

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This Article Written By Nick Garner
Founder Stamp Duty Advice Bureau
Author of Stamp Duty Land Tax Guide
For Property Investors.