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HMRC internal manual

Stamp Duty Land Tax Manual

Notification: Grant of a lease: Example 5

An agreement for a non-residential lease is entered into. The lease will be for the period from and including the date of grant until 30 June 2015 at a rent of £100,000 per annum.The tenant substantially performs the agreement by taking possession of the premises on 1 July 2005 and pays rent in accordance with the agreement at a rate of £100,000 per annum.

In the agreement for lease, this payment may be expressed as a licence fee payable for occupation during the period prior to actual completion of the lease. For stamp duty land tax purposes it is treated as rent payable under a notional lease (refer to SDLTM11010).

The notional lease is for a fixed term of 10 years (from and including 1 July 2005 to 30 June 2015).

A notional lease such as this must be notified if it meets the normal notification criteria. As it is:

  • for a term of seven years or more, and
  • granted for chargeable consideration,

it must be notified within 30 days of the effective date, in this case the date of substantial performance (so by 31 July 2005).

Refer to SDLTM17010 for details of substantial performance of agreements for lease. Refer to SDLTM07600 to SDLTM07750 for details of effective date.