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HMRC internal manual

Stamp Duty Land Tax Manual

From
HM Revenue & Customs
Updated
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Chargeable Consideration and Fees: Leases

When a new lease is granted the following payments would not be regarded as part of the chargeable consideration:

  • payment by a tenant of a landlord’s costs under the statutory provisions governing the enfranchisement or extension of leases of flats and long leases of houses, or an obligation to pay such costs;
  • payment by a tenant of a landlord’s other reasonable costs on or incidental to the grant of a lease, or an obligation to pay such costs (including of an extension to the lease, as this is treated in law as the grant of a new lease) (SI 2006/875).

The above payments are not chargeable consideration even if they are reserved as rent under the terms of the lease. However, where a single sum is provided for in the lease, to cover for example both rent and service charge, the amount excluded from chargeable consideration must be calculated according to the just and reasonable apportionment rules in FA03/SCH4/PARA4(1)(b) - refer to SDLTM11015 for details.

For more information on leases in general, please refer to SDLTM10000.