SDLTM09190 | Meaning of ‘involved in connection with’: Section 75A (1)(b)

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

Transactions which are involved in connection with the disposal of V’s chargeable interest and acquisition of that chargeable interest, or one derived from it, by P are scheme transactions. For more information on scheme transactions, see SDLTM09170.

Examples of transactions that may be involved in connection with the disposal and acquisition of a chargeable interest and, if so, would be scheme transactions are:

• transactions that affect the transfer of the chargeable interest between V and P

• transactions that form part of the context in which P acquires V’s chargeable interest, or one deriving from it

• transactions which affect the SDLT payable

A transaction will not automatically be ‘involved in connection with’ simply because it forms part of a series or sequence of successive transactions. However, if the outcome of a sequence of transactions could not be achieved without a particular transaction step, it is likely that it will meet the ‘involved in connection with’ test and will therefore be a scheme transaction because it forms part of the context by which V’s chargeable interest, or one derived from it, is transferred to P.

In situations where two or more transactions are commercially interdependent, they are likely to be involved in connection with the disposal and acquisition and therefore form part of the scheme transactions.

When considering whether a transaction is a scheme transaction, you must consider all the facts surrounding the acquisition of the chargeable interest by P. Factors to consider when considering whether a transaction is ‘in connection with’ the disposal and acquisition will include, but are not limited to:

• Planning involved

• The relationship of that step to the disposal and/or acquisition of the chargeable interest

• The proximity of transaction steps

• The reasons behind carrying out a particular step and overall intent