beta This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Stamp Duty Land Tax Manual

Calculation of stamp duty land tax: Rent: Rate thresholds: Examples

Example 1

A residential lease is granted on 1 June 2018 for consideration consisting only of rent. The net present value of the rent payable is £35,350.

As the relevant rental value (£35,350) does not exceed the residential threshold of £125,000, the 0% rate applies to the whole consideration.

No stamp duty land tax (SDLT) is therefore due on this transaction.

For guidance on the notification requirements for cases where no SDLT is due, refer to SDLTM12010.

Example 2

 

A residential lease is granted on 1 June 2018 for consideration consisting only of rent. The net present value of the rent payable is £145,350.

As the relevant rental value of the lease (£145,350) exceeds the residential threshold of £125,000, SDLT is due at a rate of 1% on the excess over £125,000.

Example 3

A lease on a shop is granted on 31 March 2018 for consideration consisting only of rent. The net present value of the rent payable is £135,350.

As the relevant rental value of the lease (£135,350) does not exceed the non-residential threshold of £150,000, the 0% rate of tax applies to the whole consideration and no SDLT is due on this transaction.

For guidance on the notification requirements for cases where no SDLT is due, refer to SDLTM12010.

Example 4

A lease on a shop is granted on 31 March 2018 for consideration consisting only of rent. The net present value of the rent payable is £165,350.

As the relevant rental value of the lease (£165,350) exceeds the non-residential threshold of £150,000, the 1% rate of tax applies to the excess over £150,000:
 

Example 5

A lease on a shop is granted on 31 March 2018 for consideration consisting only of rent. The net present value (NPV) of the rent payable is £135,350.

As part of the same deal, the tenant also enters into a lease with the landlord to rent astorage facility for the business. The NPV of the rent payable under this lease is £15,650.

Both leases are wholly non-residential.

These leases are linked transactions as they are between the same landlord and tenant and are part of a single scheme, arrangement or series of transactions.

The relevant rental values are therefore aggregated for the purposes of applying the SDLT thresholds: £135,350 + £15,650 = £151,000.

As this exceeds the non-residential threshold of £150,000 the 1% rate of tax applies tothe excess over £150,000.

Example 6

A lease on a shop is granted on 31 March 2018 for consideration consisting only of rent. The net present value (NPV) of the rent payable is £125,350. This lease is wholly non-residential.

As part of the same deal, the tenant also enters into a lease with the landlord to rent the flat above the shop. The NPV of this lease is £15,650. This lease is wholly residential.

These leases are linked transactions as they are between the same landlord and tenant and taken out at the same time as part of an arrangement. The relevant rental values are therefore aggregated for the purposes of applying the relevant SDLT threshold: £125,350 + £15,650 = £141,000.

Where a transaction includes a lease or leases which are of mixed use (residential and non- residential), or a series of transactions combines residential and non-residential leases as here, the non-residential threshold applies.

As the aggregate relevant rental value (£141,000) does not exceed the non-residential threshold of £150,000, the 0% rate applies to the whole consideration and no SDLT is due on the linked transactions

For guidance on the notification requirements for cases where no SDLT is due, refer to SDLTM12010.