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HMRC internal manual

Stamp Duty Land Tax Manual

Introduction: definitions: leases

In England and Northern Ireland a lease is defined for SDLT purposes as:

  • an interest or right in or over land for a term of years (whether that term is fixed or periodic)
  • a tenancy at will or other interest or right in or over land terminable by notice at any time (FA03/SCH17A/PARA1) (but note that a tenancy at will is an exempt interest - see SDLTM10050).

‘Term of years’ includes a term for less than a year, or for a year or years, or for a fraction of a year, or from year to year. (Law of Property Act 1925/S205 (1) (xvii)).

A lease may be preceded by an agreement for lease, which may itself include a copy of the lease to be granted. Although this agreement may operate in law as an equitable lease, for SDLT purposes it is not treated as a lease unless it is substantially performed prior to completion. (Walsh v Lonsdale (1882) 21 ChD 9: FA03/S44 and FA03/SCH17A/PARA12A).

The treatment of a lease for stamp duty land tax purposes differs depending on whether it is a lease for a definite or an indefinite term.

A lease for a definite (or fixed) termis one whose term can be ascertained at the time of grant (either from the wording of the lease itself or from some ancillary document such as an agreement for lease or certificate of practical completion). This includes a lease worded so that it ends on a specific date or one where the term is a specific length of time from the date of grant.

A lease for an indefinite (or ‘periodic’) termis any other lease. For example, a periodic tenancy is a lease for an indefinite term for SDLT purposes, as its end date is not known at the time of grant.

Refer to SDLTM14015 for the definition of fixed term lease.

Refer to SDLTM14045 for the definition of indefinite term leases.

Refer to SDLTM10040 for further details on the treatment of agreements for lease.

Refer to SDLTM10050 for further details on tenancy at will.

Refer to SDLMT00320 for  details on a  licence