An investor buying three buy-to-let flats off-plan from the same developer, completing a few months apart under three separate contracts, will often work out the SDLT on each purchase as if it stood alone — assuming the nil-rate threshold and each rate band resets every time a new completion happens. HMRC does not see three separate deals. It sees one, and it taxes it that way.
The rule: same buyer, same seller, one arrangement
Section 108 of the Finance Act 2003 links transactions where the buyer (or someone connected with them) and the seller (or someone connected with them) are the same across more than one transaction, and those transactions form part of a single scheme, arrangement or series of transactions. That last phrase is doing most of the work. It does not require a single contract, a single completion date, or even a single point in time — it requires the transactions to be part of the same overall deal, however that deal happens to be documented or staged.
This is a different question to the "6 or more dwellings treated as non-residential" rule that sits inside the same part of the legislation, and different again from Multiple Dwellings Relief, which was abolished from 1 June 2024. Linked transactions is older, broader, and still very much alive — and because it turns on connection and arrangement rather than headcount, it catches deals that look, on paper, like nothing more than a buyer who happened to purchase from the same seller more than once.
How the tax is actually calculated
Where transactions are linked, SDLT is not worked out purchase by purchase. The consideration for every linked transaction is added together first, the normal rate bands (including any higher rates surcharge that applies) are applied to that combined total, and the resulting tax bill is then apportioned back across the individual transactions in proportion to what was paid for each one. The practical effect is that a buyer who might have paid nothing, or a modest amount, on a lower-value early completion can find that same completion taxed at a materially higher blended rate once later, more valuable completions in the same arrangement are brought into the calculation — sometimes on a further SDLT return once the later transaction happens and the earlier one needs revisiting.
Because each transaction still needs its own SDLT return, the apportionment has to be recalculated and, where necessary, corrected every time a new linked transaction completes. That is easy to miss when purchases are spread months apart and handled as if each one were a fresh, unconnected deal by whoever is filing the return at the time.
Where this catches property investors and developers
The scenario we see most often is a portfolio investor or a developer buying several units in a new-build scheme directly from the housebuilder, with completions staggered across a build programme. Each unit has its own contract, its own completion date, and often its own solicitor's file — but if the units were agreed as part of one overall purchase arrangement with the same developer, HMRC's starting position is that they are linked, regardless of how the conveyancing was structured around them.
The same issue arises the other way round for developers assembling a site: buying adjoining plots or parcels of land from the same landowner in stages, sometimes years apart as options are exercised or further parcels become available, can also be linked where the parcels were always part of one assembly arrangement rather than genuinely independent, unconnected acquisitions. Anyone piecing together a development site through several purchases should treat the linking question as part of the acquisition structure from day one, not as an afterthought once the last plot completes.
Connected-party purchases carry the same risk in miniature: a couple buying two flats in the same block, one each, or a company and its director buying neighbouring units, can be linked even though each transaction looks like a standalone purchase by a different legal buyer, because the connected-persons test reaches through separate names to the same underlying interest.
What doesn't break the link
The features that feel like they should separate two purchases usually don't, on their own. Different completion dates, months or even years apart, do not break the link if the transactions were always part of the same scheme. Separate contracts and separate conveyancing files do not either — HMRC looks at the substance of the arrangement between the parties, not how many documents it was split across. Paying for each purchase from a different bank account or through a different SPV in the same group can also fail to help, because the connected-persons rules look through corporate structure to common ownership and control.
What actually matters is whether the transactions were genuinely independent when each one was agreed — a buyer who purchases one property from a seller, and only later, with no prior arrangement or expectation, agrees a wholly separate purchase from the same seller some time afterward, has a much stronger case that the two are not linked. The weaker that independence, the more likely HMRC is to treat a sequence of purchases as one arrangement taxed as a whole.
Common mistakes
- Assuming each purchase resets the nil-rate and rate-band thresholds simply because it has its own contract and completion date
- Treating staggered completions on a phased new-build purchase as automatically unconnected because the build programme, not the buyer, dictated the timing
- Missing the need to revisit and correct an earlier SDLT return once a later linked transaction completes and changes the blended rate
- Overlooking that purchases by connected individuals or group companies can be linked even where the legal buyer's name changes each time
- Not factoring the linking risk into how a site assembly or portfolio purchase is structured before the first transaction is even agreed
What this means for buyers
Anyone planning to buy more than one property from the same seller, whether that's a batch of investment units, a phased site assembly, or a portfolio bought unit by unit, should work out the linked transaction position before the first purchase completes, not after the last one does. That means being upfront with HMRC and with advisers about the full scope of the arrangement, keeping the apportionment calculation current as each transaction lands, and building any correction returns into the timetable rather than discovering them as a surprise months later. It sits alongside the wider planning we do with developers and investors around SDLT on development and portfolio purchases, where getting the structure right at the outset is almost always cheaper than untangling it afterward.
Common questions
What makes two property purchases linked transactions for SDLT?
Transactions are linked under section 108 Finance Act 2003 where they involve the same buyer (or people connected to them) and the same seller (or people connected to them), and form part of a single scheme, arrangement or series of transactions. Separate contracts, separate completion dates and even purchases months apart do not stop transactions being linked if they are all part of the same overall deal.
How is SDLT calculated on linked transactions?
The total consideration across all linked transactions is added together, and the SDLT rate bands are applied to that combined figure rather than to each purchase individually. The resulting tax is then apportioned between the individual transactions in proportion to the consideration paid for each one, so every purchase in the chain is taxed at a blended rate reflecting the whole deal, not just its own price.
Does buying new-build units in phases from a developer count as linked transactions?
It can. If an investor agrees to buy several units from the same developer as part of one overall arrangement, HMRC can treat each phase or plot completion as linked even where completions are staggered over months and documented under separate contracts, because it is the connection between the same buyer and seller and the existence of a single scheme that matters, not how the paperwork is structured or timed.
Kieran Holsgrove is a Director and Co-Founder of Grafene Accounting, the property tax specialist firm based in Liverpool. He advises property developers, investors and landlords across Merseyside, Greater Manchester, Lancashire and Cheshire on tax structuring, developer VAT, SDLT and the long-view decisions that compound over the life of a portfolio.
This article is general information, not personal tax advice, and tax rules change. Your own position depends on facts we cannot see from here — please take advice before acting on anything above.