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HMRC internal manual

Stamp Duty Land Tax Manual

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HM Revenue & Customs
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Calculation of stamp duty land tax: Lease premium: Relevant rental figure: Example 2

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 £125,000 and a ground rent of £1,200 per year. The ground rent does not change.

The relevant rental figure is the same as the annual rent in this case, i.e. £1,200. As this is more than £1,000, the 0% threshold is not available for the purposes of calculating tax on the premium. As the premium is below the £250,000 threshold, it is taxable at 1%.