Stamp duty on divorce property transfers
Most property transfers between spouses or civil partners as part of a divorce or dissolution are exempt from SDLT, under the dedicated divorce-and-dissolution relief in the Finance Act 2003. The exemption applies whether or not money changes hands.
Last reviewed 16 May 2026.
The exemption in plain English
Schedule 3 paragraph 3 of the Finance Act 2003 exempts property transfers made under a court order or formal agreement in connection with the dissolution or annulment of a marriage or civil partnership. The exemption covers:
- court orders for property adjustment (financial remedy orders)
- formal separation agreements that include property terms
- transfers made in connection with the legal end of the relationship
Because the transfer is exempt, no SDLT is due on the value transferred, even if the receiving spouse takes on a mortgage or makes a cash payment to the other in exchange.
What the exemption does not cover
The exemption is narrower than it first looks. It does not cover:
- transfers between unmarried partners (cohabitees), regardless of how long they were together
- transfers to or from a new partner after the divorce
- transfers between siblings, parents, or other family members as part of an estate restructuring
- purchases by either party of a new property after divorce, those follow normal SDLT rules
The post-divorce purchase: surcharge issues
The trickier question is usually the new home each party buys after the divorce. If you keep a share in the matrimonial home (because the other spouse has the right to live there until children grow up, for example), you are still treated as owning a residential property. That can trigger the 5% additional-property surcharge on a new home you buy.
A common solution is a clean break with a property adjustment order transferring the matrimonial home outright to one party. Once you no longer have any interest in the previous home, a new purchase is treated as a standard or first-time-buyer purchase rather than an additional one.
Mesher and Martin orders
Mesher orders (sale of the home deferred until a trigger event such as the children reaching 18) and Martin orders (the remaining party has a life interest) typically leave the departing party with a beneficial interest in the matrimonial home. HMRC treats this as continuing ownership for surcharge purposes, so a new purchase by the departing party will normally attract the surcharge until the matrimonial home is sold and their share paid out.
Practical steps
- get the property transfer documented in a court order or recognised separation agreement
- your conveyancer files an SDLT1 return claiming the divorce-and-dissolution relief, even though no tax is due
- retain the order or agreement, HMRC can ask for evidence
- if buying a new home post-divorce, take advice on whether you still hold an interest in the previous one for surcharge purposes