SDLTM09210 - The notional land transaction: Section 75A (1)(c)

(This page was introduced on 15 January 2020 and updated on 14 May 2021)

The third condition to consider in applying Section 75A is found at s75A(1)(c).

For this condition to be met, the amounts of SDLT payable in respect of the actual scheme transactions must be less than the amount of SDLT payable on a notional land transaction consisting of the disposal of a chargeable interest by V and subsequent acquisition of that chargeable interest by P.

As per SDLTM09170, a scheme transaction need not be a land transaction. Where a scheme transaction is a land transaction, it will be disregarded and will be replaced by the notional land transaction. When applying Section 75A, in place of all the scheme transactions which are land transactions there will be a substituted notional land transaction consisting of the acquisition of V’s chargeable interest by P, which V has disposed of.

When considering if this third condition is met, it is important to consider P’s notional acquisition of V’s chargeable interest and not one deriving from it. This will be important, for example, when considering any relief available on the acquisition of V’s chargeable interest disposed of by V.

Section 75A will not apply where the third condition, the comparison test, is met only because of the following:

• Section 71A – Alternative property finance (see SDLTM28100)
• Section 72 – Alternative property finance in Scotland, repealed with effect in relation to land transactions with an effective date on or after 01 April 2015
• Section 72A - Alternative property finance in Scotland, repealed with effect in relation to land transactions with an effective date on or after 01 April 2015
• Section 73 - Alternative property finance (see SDLTM28400)
• A provision of Schedule 9 – Right to Buy and Shared Ownership (see SDLTM27000)

Section 75A can still apply in circumstances where one of the above sections or schedules is combined with another relief.