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HMRC internal manual

Stamp Duty Land Tax Manual

Lease premium

Non-residential or “mixed” property

For leases of non-residential property, where consideration is in the form of both premium and rental payments, under FA03/SCH5/PARA9 these are considered together for the purposes of SDLT so that the tax-free threshold is not available twice for the same transaction.

Property comprising both residential and non-residential elements is treated as non-residential for this purpose.

Provided that the relevant rental figure is below £1,000, the premium will be charged according to the usual rates and thresholds, including the 0% rate for a premium not exceeding £150,000.

However if the relevant rental figure exceeds £1,000, the 0% rate does not apply to the premium element of the consideration, so all the consideration consisting of premium is chargeable at a rate of 1%.

Note that in certain circumstances:

  • ‘rent’ payable in respect of the period before the date on which the lease is granted may be taxable as a premium – refer to SDLTM17110.
  • rent deposits may be treated as a premium for the grant of the lease – refer to SDLTM13040.

For guidance on the relevant rental figure, refer to SDLTM13015.

Non-residential property is defined for SDLT purposes as property which is not residential property – refer to SDLTM20070 and FA03/S116

The figure of £1,000 applies for transactions where the effective date is on or after 12th March 2008: before that date it was £600.