Where a land transaction involves dividing or partitioning a chargeable interest to which parties are jointly entitled (whether a single chargeable interest or more than one chargeable interest), this is not treated as an exchange. The giving up of a share in one part of the land is not treated as chargeable consideration for the acquisition of a share in another part.
“Jointly entitled” means entitled as joint owners or common owners.
Summary
Where parties jointly own land and divide that land between themselves:
- Paragraph 6 may apply to one or more chargeable interests.
- The provision removes both chargeable consideration and the market value override.
- Where the interests taken are of equivalent value, no LBTT arises.
- Where a balancing payment is made, LBTT applies only to that payment.
LBTT(S)A 2013 schedule 2 paragraph 6
Blue and Purple each own equal shares of a field. They agree to divide the field so that each takes a 50% share and each becomes the sole owner of their respective portion.
If each half of the land is of equal value, then no LBTT is chargeable.
Orange and Red jointly own fields X and Y in equal shares. They agree that Orange will take complete ownership of X and Red will take complete ownership of Y. The values of the half‑shares in X and Y are equal therefore no LBTT is chargeable.
If the values of the interests received are unequal, LBTT is chargeable only on any balancing payment, calculated under normal rules.