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HMRC internal manual

Stamp Duty Land Tax Manual

HM Revenue & Customs
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Calculation of stamp duty land tax: Deposit & loan arrangements: Example 1

A lease of non-residential property is granted on 1 June 2005 for a term of 10 years at an annual rent of £50,000 subject to review on 1 June 2010. The tenant pays a rent deposit of £25,000 to the landlord on the grant of the lease.

The relevant maximum rent is £50,000 (the annual rent).

As the rent deposit is less than twice the relevant maximum rent it is not treated as consideration other than rent (premium) for the grant of the lease. Stamp duty land tax is only chargeable on the net present value of the rent.