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HMRC internal manual

Stamp Duty Land Tax Manual

Calculation of stamp duty land tax: Deposit & loan arrangements: Example 4

A lease of non-residential property is granted on 1 June 2008 for a term of 15 years at an annual rent of £15,000 subject to review on 1 June 1012 and 1 June 2017 to 30% of the open market rent. On the grant of the lease the tenant pays a rent deposit of £200,000 as a disguised premium for the grant of the lease.

The rent review provisions are disregarded and relevant maximum rent is £15,000.

The rent deposit is more than twice the relevant maximum rent. It also exceeds the non- residential 0% threshold and is therefore taxable at 1%.

The net present value of the rent is also taxable, as it too exceeds the 0% threshold.