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HMRC internal manual

Stamp Duty Land Tax Manual

Calculation of stamp duty land tax: Lease premium: Relevant rental figure: Example 1

This example relates to the calculation of the relevant rental figure under FA03/SCH5/PARA9(2A) and FA03/SCH5/PARA9(3) for the purpose of calculating stamp duty land tax (SDLT) on the premium paid for a lease of non-residential property where the effective date is on or after 12 March 2008 (see SDLTM13012).

The amounts used for calculating the relevant rental figure may be different from those usedfor determining the net present value of the rent – refer to SDLTM13075.

A non-residential lease for 999 years is granted on 1 June 2008 for a premium of £140,000 and a ground rent of £500 per year. The ground rent does not change.

The relevant rental figure is £500 which does not exceed £1,000 so does not cause the non- residential threshold to be modified for the purposes of calculating tax on the premium.

No stamp duty land tax is payable on the premium as it is below the threshold of £150,000 for the 0% rate band for non-residential property. However, the transaction is notifiable as the lease is for seven years or more and chargeable consideration has been given (refer to SDLTM12010).