Chargeable Consideration, Premium, Payments for lease
The legislation refers to:
- chargeable consideration which ‘consists of or includes rent’ (see SDLTM11010) and
- ‘consideration other than rent’, i.e. a premium.
Consideration given by a tenant to a landlord for the grant of a lease will be charged to SDLT as a premium unless it is by way of rent (or otherwise exempt from charge).
Chargeable consideration for the grant of a lease which is in respect of a period before the lease is granted is not normally treated as rent for SDLT purposes, even if it is described as such, although it may be taxed as a premium. The exception to this rule is where the rent relates to a backdated renewal of an existing SDLT lease on or after 19 July 2006, FA03/SCH17A/PARA9A
Premium payments for a lease are charged to SDLT in the same way as other chargeable consideration.
Where both a premium and rent is payable for the grant of a lease, the tax due on the two elements of consideration will be calculated separately and added together to determine the total SDLT payable.
For treatment of consideration in respect of pre-grant periods, refer to SDLTM17110 and SDLTM14110
For further details of how SDLT is calculated on premiums, refer to SDLTM13010 and FA03/S55.
Refer to SDLTM13100 onwards for details of how SDLT is charged on rents.