Finance Act 2003, section 44

Contract and conveyance

Part 4 Stamp duty land tax

(1)This section applies where a contract for a land transaction is entered into under which the transaction is to be completed by a conveyance.

(2)A person is not regarded as entering into a land transaction by reason of entering into the contract, but the following provisions have effect.

(3)If the transaction is completed without previously having been substantially performed, the contract and the transaction effected on completion are treated as parts of a single land transaction. In this case the effective date of the transaction is the date of completion.

(4)If the contract is substantially performed without having been completed, the contract is treated as if it were itself the transaction provided for in the contract.

In this case the effective date of the transaction is when the contract is substantially performed.

(5) A contract is “substantially performed” when—

(a)the purchaser[F53 , or a person connected with the purchaser,F53] takes possession of the whole, or substantially the whole, of the subject-matter of the contract, or

(b)a substantial amount of the consideration is paid or provided.

(6)For the purposes of subsection (5)(a)—

[F54 (a)possession includes receipt of rents and profits or the right to receive them, andF54]

(b)it is immaterial whether [F55possession is takenF55] under the contract or under a licence or lease of a temporary character.

(7)For the purposes of subsection (5)(b) a substantial amount of the consideration is paid or provided—

(a)if none of the consideration is rent, where the whole or substantially the whole of the consideration is paid or provided;

(b)if the only consideration is rent, when the first payment of rent is made;

(c)if the consideration includes both rent and other consideration, when—

(i)the whole or substantially the whole of the consideration other than rent is paid or provided, or

(ii)the first payment of rent is made.

(8)Where subsection (4) applies and the contract is subsequently completed by a conveyance—

(a)both the contract and the transaction effected on completion are notifiable transactions, and

(b)tax is chargeable on the latter transaction to the extent (if any) that the amount of tax chargeable on it is greater than the amount of tax chargeable on the contract.

(9)Where subsection (4) applies and the contract is (to any extent) afterwards rescinded or annulled, or is for any other reason not carried into effect, the tax paid by virtue of that subsection shall (to that extent) be repaid by the Inland Revenue.

Repayment must be claimed by amendment of the land transaction return made in respect of the contract.

[F56 (9A)Where—

(a)paragraph 12A of Schedule 17A applies (agreement for lease), or

F57 (b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

it applies in place of subsections (4), (8) and (9).F56]

(10)In this section—

(a)references to completion are to completion of the land transaction proposed, between the same parties, in substantial conformity with the contract; and

(b) “contract” includes any agreement and “conveyance” includes any instrument.

[F58 (11)[F59 Section 1122 of the Corporation Tax Act 2010F59] (connected persons) has effect for the purposes of this section.F58]

Definitions used in section 44 9

land transaction

(1) In this Part a “land transaction” means any acquisition of a chargeable interest. As to the meaning of “chargeable interest” see section 48.

Defined in s.43(1) · see it in the full Act
completed

(5) In this paragraph “substantially performed” and “completed” have the same meanings as in section 44 (contract and conveyance) .

Defined in Sch.17A para.12A(5) · see it in the full Act
substantially performed

(5) In this paragraph “substantially performed” and “completed” have the same meanings as in section 44 (contract and conveyance) .

Defined in Sch.17A para.12A(5) · see it in the full Act
purchaser

(4) References in this Part to the “purchaser” and “vendor”, in relation to a land transaction, are to the person acquiring and the person disposing of the subject-matter of the transaction.

Defined in s.43(4) · see it in the full Act
connected

(6) In sub-paragraph (5) “trustee” is to be read in accordance with section 1123(3) of CTA 2010 (“connected” persons: supplementary).

Defined in Sch.7A para.9(6) · see it in the full Act

(6) In sub-paragraph (5) “trustee” is to be read in accordance with section 1123(3) of CTA 2010 (“connected” persons: supplementary).

Defined in Sch.7A para.19(6) · see it in the full Act
lease

5 In paragraphs 3 and 4 “lease” means any arrangements that provide for a ship to be leased or otherwise made available by one person to another.

Defined in Sch.32 para.5 · see it in the full Act
tax

“tax”, unless the context otherwise requires, means tax under this Part.

Defined in s.121 · see it in the full Act
the Inland Revenue

(1) References in this Part to “the Inland Revenue” are to any officer of the Board, except as otherwise provided.

Defined in s.113(1) · see it in the full Act
connected persons

(8) In sub-paragraph (7) “trustee” is to be read in accordance with section 1123(3) of CTA 2010 (“connected persons”: supplementary).

Defined in Sch.4A para.5A(8) · see it in the full Act

Cases considering section 44 16

Oisin Fanning v The Commissioners for HMRC

[2023] EWCA Civ 263 · 13 March 2023Interprets

Interprets section 44 as the general framework under which SDLT ordinarily arises on completion, while substantial performance can trigger liability earlier. Completion is by conveyance, and substantial performance concerns possession or substantial consideration. Section 45 modifies that framework. (see paras [13]; [35]; [47]-[50]) Interprets section 44(1) as confined to a contract that is to be completed by a conveyance. An unexercised option does not fall within that description because it may never result in a conveyance. (see paras [17]; [35]; [49]) Interprets completion as occurring between the same parties and in substantial conformity with the contract. This supports assessing section 45 by reference to the real-world parties and transactions. (see paras [44]; [47]) Confirms that entering into a contract does not itself constitute entering into a land transaction, subject to the statutory treatment of substantial performance and the modifications made by section 45. (see paras [17]; [39]) Cites the treatment of completion without prior substantial performance as a single land transaction, but the decision turns on whether section 45 applies to the option. (see para [13]) Applies the concept of substantial performance by reference to possession or payment of a substantial amount of consideration. An option premium alone does not constitute substantial performance of the conveyance transaction contemplated by section 45. (see paras [47]; [50]; [61]) Applies the rule that substantial performance may arise from payment of a substantial amount of the consideration. The relevant consideration is that which would become due on completion of the land transaction. (see paras [47]; [50]) Confirms the adjustment mechanism intended to prevent a double charge where a contract is substantially performed and later completed by conveyance. (see paras [13]; [48])

Christian Peter Candy v The Commissioners for HMRC

[2022] EWCA Civ 1447 · 3 November 2022Limits

Section 44 was interpreted as addressing both avoidance by resting on contract and the potential unfairness of taxing substantial performance without completion. Its structure supported applying the general amendment time limit (see paras [40]–[46]; [53]). Section 44(4) was applied to treat substantial performance without completion as the relevant SDLT transaction and tax point. The charge could therefore arise before formal completion (see paras [24]–[25]; [43]; [50]–[52]). Section 44(5) identifies possession or payment of a substantial amount of consideration as routes to substantial performance (see para [43]). Section 44(5)(a) was applied in recognising that taking possession of the whole or substantially the whole of the subject matter constitutes substantial performance (see paras [8]; [43]). Section 44(5)(b) was noted as the alternative route to substantial performance where a substantial amount of consideration is paid or provided (see para [43]). Section 44(6)(b) confirms that possession under a temporary licence or lease is sufficient for the possession-based substantial-performance rule (see para [43]). Section 44(8) was treated as a safeguard where a contract is subsequently completed after substantial performance. It demonstrates that Parliament addressed later events expressly within the statutory scheme (see paras [44]–[45]). Section 44(8)(a) requires both the contract and the transaction on completion to be notifiable after substantial performance (see para [45]). Section 44(8)(b) limits tax on the later transaction to any excess over the tax chargeable on the contract, confirming the statutory protection against duplicate charging (see para [45]). Section 44(9) gives the substantive right to repayment where a substantially performed contract is rescinded, annulled or not carried into effect, but requires the claim to be made by amendment of the return. It does not displace the time limit in Schedule 10, paragraph 6(3) (see paras [46]; [48]–[59]).

Project Blue Ltd v Revenue and Customs

[2016] EWCA Civ 485 · 26 May 2016Interprets

Section 44 governs contracts for land transactions completed by conveyance or transfer. The Court used it as the general rule modified by section 45. (see paras [11]-[12], [15]-[17]) The contract is not treated as a land transaction unless completion fails but the contract is substantially performed. The Court used this structure in applying the statutory sequence to the composite completion. (see paras [12], [16]-[17]) On completion, the contract and transaction are treated as one land transaction with the effective date at completion. Section 45 modifies that operation for simultaneous sub-sales. (see paras [12], [15]-[17])

What each judgment says about section 44 is in the case-law panel in the full Act.

Amendments and notes

17 notes from legislation.gov.uk

Amendments

  1. F53Words in s. 44(5)(a) inserted (with effect in accordance with Sch. 39 para. 26 of the amending Act) by Finance Act 2004 (c. 12), Sch. 39 para. 15(2) (which amending provision re-enacts, subject to certain changes, a corresponding amendment made by the now revoked Stamp Duty and Stamp Duty Land Tax (Variation of the Finance Act 2003) (No. 2) Regulations 2003 (S.I. 2003/2816), see Sch. 39 para. 14)
  2. F54S. 44(6)(a) substituted (with effect in accordance with Sch. 39 para. 26 of the amending Act) by Finance Act 2004 (c. 12), Sch. 39 para. 15(3)(a) (which amending provision re-enacts, subject to certain changes, a corresponding amendment made by the now revoked Stamp Duty and Stamp Duty Land Tax (Variation of the Finance Act 2003) (No. 2) Regulations 2003 (S.I. 2003/2816), see Sch. 39 para. 14)
  3. F55Words in s. 44(6)(b) substituted (with effect in accordance with Sch. 39 para. 26 of the amending Act) by Finance Act 2004 (c. 12), Sch. 39 para. 15(3)(b) (which amending provision re-enacts, subject to certain changes, a corresponding amendment made by the now revoked Stamp Duty and Stamp Duty Land Tax (Variation of the Finance Act 2003) (No. 2) Regulations 2003 (S.I. 2003/2816), see Sch. 39 para. 14)
  4. F56S. 44(9A) inserted (with effect in accordance with Sch. 39 para. 13(3)-(6) of the amending Act) by Finance Act 2004 (c. 12), Sch. 39 para. 3
  5. F57S. 44(9A)(b) omitted (with effect in accordance with s. 29(4) of the amending Act) by virtue of Scotland Act 2012 (c. 11), s. 44(2)(b)(3)(b), Sch. 3 para. 3 (with s. 29(5)(6)); S.I. 2015/637, art. 2
  6. F58S. 44(11) added (with effect in accordance with Sch. 39 para. 26 of the amending Act) by Finance Act 2004 (c. 12), Sch. 39 para. 15(4) (which amending provision re-enacts, subject to certain changes, a corresponding amendment made by the now revoked Stamp Duty and Stamp Duty Land Tax (Variation of the Finance Act 2003) (No. 2) Regulations 2003 (S.I. 2003/2816), see Sch. 39 para. 14)
  7. F59Words in s. 44(11) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 401 (with Sch. 2)

Modifications

  1. C16S. 44(8) restricted (temp.) (22.7.2020) by Stamp Duty Land Tax (Temporary Relief) Act 2020 (c. 15), s. 1 (as amended (10.6.2021) by 2021 c. 26, s. 87(2))
  2. C17S. 44(8) restricted (temp.) (8.2.2023) by Stamp Duty Land Tax (Temporary Relief) Act 2023 (c. 2), s. 1 (as amended (20.3.2025) by 2025 c. 8, s. 52(4))
  3. C18S. 44(8) excluded (20.3.2025) by Finance Act 2025 (c. 8), s. 53(5)
  4. C19S. 44(8) excluded (10.6.2021) by 2020 c. 15, s. 1A (as inserted by 2021 c. 26, s. 87(3) and as amended (20.3.2025) by 2025 c. 8, s. 52(3))
  5. C20S. 44(8) excluded (20.3.2025) by Finance Act 2025 (c. 8), s. 52(5)
  6. C21S. 44(10) applied (temp.) (22.7.2020) by Stamp Duty Land Tax (Temporary Relief) Act 2020 (c. 15), s. 1 (as amended (10.6.2021) by 2021 c. 26, s. 87(2) and (20.3.2025) by 2025 c. 8, s. 52(2))
  7. C22S. 44(10) applied (temp.) (8.2.2023) by Stamp Duty Land Tax (Temporary Relief) Act 2023 (c. 2), s. 1
  8. C23S. 44(10) applied (20.3.2025) by Finance Act 2025 (c. 8), s. 52(6)
  9. C24S. 44(10) applied (20.3.2025) by Finance Act 2025 (c. 8), s. 53(6)

Commencement

  1. I17Pt. 4 wholly in force at Royal Assent subject to Sch. 19, see s. 124, Sch. 19 para. 1(1)