For a narrow slice of the property market, stamp duty is a six-figure sum. In 2025 there were 763,112 standard price-paid transactions in England and Wales (HM Land Registry). Of those, 28,592 — 3.75% — changed hands for more than £925,000, the price at which the 10% Stamp Duty Land Tax (SDLT) band begins, and 8,292 (1.09%) crossed £1.5m, where the top 12% band bites and the charge starts at £93,750 (HMRC rates, checked 1 August 2026). At £2m the standard bill is £153,750.
It was at that thin top of the market that a family of avoidance structures once flourished, all built around a single idea: if you never actually completed a purchase, you never triggered the tax. The best known was "resting on contract." Every version has since been closed. This is how they were meant to work — and the three separate pieces of law that between them shut the door.
The starting point: SDLT is charged on the land, not the paperwork
Stamp Duty Land Tax replaced the old stamp duty in December 2003. The old tax was a duty on documents — the deed of transfer. That created an obvious gap: if no deed was ever executed, there was arguably nothing to stamp. A buyer could exchange contracts, pay the price, take the keys, collect the rent, and simply decline to complete the formal transfer, "resting" on the contract indefinitely.
SDLT was designed from the outset to remove that gap. It is a tax on transactions in land, not on documents, and it uses two trigger points rather than one.
The first door: substantial performance (section 44)
Section 44 of the Finance Act 2003 says that where a contract is to be completed by a conveyance, the tax is normally due on completion — but if the contract is "substantially performed" before it is completed, that substantial performance is treated as if it were the completion. A notional land transaction arises, and its effective date is the date of substantial performance.
A contract is substantially performed when one of two things happens (section 44(5)):
- the purchaser takes possession of the whole, or substantially the whole, of the property — which includes receiving the rents and profits, or the right to them (section 44(6)); or
- a substantial amount of the consideration is paid. HMRC treats "substantial" as around 90% or more of the price (SDLT Manual).
This is what defeats plain "resting on contract." The moment the buyer takes the keys or pays the bulk of the money, the clock starts and the tax falls due — no transfer deed required. The mechanics of that trigger, and the 14-day filing window it opens, are set out in more detail in our guide to substantial performance versus completion.
The second door: the sub-sale rewrite (section 45)
Substantial performance closes the simplest scheme, but a more sophisticated version used a genuine feature of the law: sub-sale relief.
A sub-sale is a legitimate, everyday transaction. Seller X contracts to sell to buyer A; before A completes, A sells the same interest on to B, and X transfers straight to B. It would be unfair to tax both the X→A leg and the A→B leg on the same land, so the original section 45 gave relief for the middle step. Property traders, developers assembling sites, and off-plan buyers assigning new-build reservations all rely on it — new-build accounted for 4.7% of 2025 transactions (HM Land Registry), and off-plan assignment is common at that end.
The abuse bolted an artificial step onto that genuine relief: rest on contract and route the deal through a sub-sale so that, the argument ran, neither leg was chargeable — the original contract was never completed, and the sub-sale leg was relieved.
The Finance Act 2013 rewrote section 45 and introduced a dedicated code for pre-completion transactions (Schedule 2A to the Finance Act 2003), effective for transactions from 2013. The new rules recast the middle step as a "transfer of rights" and deem the transferee (B) to hold a "secondary contract" with the original seller. Relief for the pre-completion step is available — so genuine sub-sales are not double-taxed — but only where the onward transfer is itself completed or substantially performed, and the relief no longer leaves an untaxed gap. Someone in the chain is always brought into charge. HMRC sets out the mechanics in its SDLT Manual from SDLTM01000 onwards.
The backstop: section 75A anti-avoidance
Behind both of those sits a broad sweep-up. Sections 75A to 75C of the Finance Act 2003 — introduced with effect from 6 December 2006 and placed on a permanent statutory footing by the Finance Act 2007 — apply where:
- one person (V) disposes of a chargeable interest and another (P) acquires it;
- a number of transactions ("scheme transactions") are involved in connection with that disposal and acquisition; and
- the SDLT actually payable on the scheme transactions is less than the tax that would be due on a single "notional transaction" moving the interest straight from V to P.
Where it applies, the intermediate steps are disregarded and SDLT is charged on the notional V-to-P transaction, on the largest amount of consideration passing. Crucially, the Supreme Court confirmed in Project Blue Ltd v HMRC [2018] UKSC 30 — the Chelsea Barracks case, involving a sub-sale combined with a finance leaseback — that section 75A is mechanical and requires no tax-avoidance motive. If the numbers fall within it, it bites, whatever the parties intended.
Who pays, and when: the worked contrast
The practical question is: buyer A assigns the contract to buyer B before completion — who is charged? The answer depends entirely on what actually happened.
| Situation | The chain | Who is charged, and when |
|---|---|---|
| Genuine sub-sale | X sells to A; A assigns to B before completing; X transfers straight to B | B is charged on the price B gives, when the transfer to B completes or is substantially performed. A can claim relief so the X→A contract is not separately taxed — provided A did not first substantially perform it. |
| "Resting on contract" | X sells to A; A takes possession and the rent but never completes | A is charged from the day A takes possession — substantial performance under section 44 treats that as completion. No transfer deed is needed. |
| The old scheme (pre-2013) | X sells to A; A rests on contract and later assigns, relying on old sub-sale relief to leave a gap | Closed. The rewritten section 45 and section 75A ensure the tax lands on the notional X-to-final-buyer transaction. There is no untaxed gap. |
The through-line is simple: there is no longer a version of "buy the benefit of the property but never complete" that escapes the charge. The tax attaches to the substance of the acquisition, not to whether a particular deed was signed.
Why this still matters
These are closed schemes, not live options, and the point of setting them out is to explain how the current rules reach the same result whichever route a transaction takes. The consequences of getting an SDLT position wrong — whether through an aggressive structure or an honest error — run from interest and penalties up to public naming for the largest deliberate defaults, as our guide to the full stamp duty consequence stack explains.
Pre-completion timing questions arise in ordinary transactions too, not just avoidance ones — an off-plan assignment, a delayed completion where the buyer moves in early, or the grant of an option to buy. The related mechanics of options and rights of pre-emption turn on the same idea that a charge can crystallise before the final purchase.
You can see how the headline SDLT bands translate into a real all-in monthly cost for any street — including the top-end postcodes where these structures once lived, such as Westminster (SW1A 1AA) — using the Homecost postcode tool. For more on how the tax works across price points, browse the cost intelligence guides.
This article explains how the rules operate; it is general information, not tax or legal advice, and every transaction turns on its own facts. Speak to a qualified adviser before acting.
Figures based on 763,112 HM Land Registry standard price-paid transactions for England and Wales in 2025 and HMRC 2026 SDLT rates. More cost guides.