Partnership SDLT Exemptions and GP Surgery Property: Understanding the Real Risks

There appears to be increased interest from HMRC and the Land Registry in partnership-related SDLT claims. While the underlying law has not changed, practices are now commonly receiving requisitions asking for further detail on why a property transaction qualifies for SDLT exemption.

Many GP partners are familiar with the concept of the partnership Stamp Duty Land Tax (SDLT) exemption and often assume that transfers involving GP surgery premises are automatically free from SDLT. In practice, this is a complex and frequently misunderstood area of tax law. This briefing explains how the exemption works, why it is not always available, and where GP practices are most at risk.

Because SDLT is a self-assessed tax, the responsibility rests with GP partners to identify when a chargeable event has occurred and ensure the correct return is filed. For practices undergoing structural change—such as mergers, retirements or incorporations—the financial and governance implications can be significant.

The critical starting point is establishing whether a surgery building is genuinely a partnership asset. Partnerships cannot be registered owners of land, so properties are held in the names of individual partners as nominees. Under general property law, there is a presumption that those named individuals own the property personally. That presumption must be clearly rebutted for the partnership SDLT exemption to apply.

Crucially, it is not enough that:

• the partners operate from the building;
• the building is used exclusively for NHS services; or
• property capital appears in the partnership accounts.

To qualify as a partnership asset, there must be clear, explicit and properly executed documentation—typically within the partnership deed—confirming that the property is held as a partnership asset. This is a high evidential threshold because it has to rebut the public record at the Land Registry where only individuals are named.

Where a building is genuinely a partnership asset, routine partner buy-ins and buy-outs are treated as changes in partnership interests rather than land transactions, and they therefore fall outside the scope of SDLT. From a Land Registry perspective this is ‘unusual’ and has been the trigger for an increasing number of requisitions checking the true status of the building.

In this context however, it is important to understand that several common events do give rise to SDLT charges, even though no change may appear on the Land Registry title

These include:

• Practice mergers, where assets move from two or more partnerships into one.
• Bringing a property into the partnership, which is itself a chargeable event and restricts further changes for three years.
• Partner retirements, where retained property interests may convert partnership property into a personal investment.
• Practice incorporations, where property transfers to a company or the partnership becomes a property-investment vehicle.
• Practice closure, which ends the trading partnership and can crystallise a chargeable event.

There are some practical steps that practices can take to mitigate their risks:

1. Review partnership documentation to confirm whether surgery premises are clearly documented as partnership assets. Obtain legal advice if necessary as changing the status can have significant consequences
2. Do not rely on assumptions based on usage, accounting treatment or historical practice.
3. Flag SDLT risk early when mergers, retirements, incorporations or restructures are proposed.
4. Seek specialist tax and legal advice before any transaction involving premises or changes to structure (eg. mergers, incorporation, retirements without full buy-outs).

Partnership SDLT is a highly specialist and frequently misunderstood area. With likely increased scrutiny, GP practices should adopt a precautionary approach. Clear documentation, early advice and robust governance are essential to avoid costly and unexpected SDLT liabilities at times of organisational change. If you would like assistance with any of the issues raised in this blog, contact DR Solicitors.