Stamp duty, SDLT and partnerships
HMRC have confirmed that following legal advice they have changed their view relating to the treatment of limited liability partnerships (LLPs) for the purposes of SDLT group relief. Prior to this change, LLPs were disregarded when considering whether a group relationship existed.
LLPswill now be recognised as the parent in a group structure stamp tax group. However, as an LLP does not itself have issued ordinary share capital it cannot be the subsidiary of other companies even if they are members of the LLP. HMRC’s revised view does not affect which party can claim SDLT group relief, but does affect which entities are regarded as forming part of a group for SDLT purposes.
HMRC will continue to treat English limited partnerships and general partnerships as transparent entities. As such the companies that are the partners of an English general or limited partnership can, depending upon the facts, be grouped with those companies that are below the partnership in the group structure.
Scottish partnerships will continue to be treated as opaque entities but as they are not bodies corporate cannot be the parent of a group of companies.