Calculation of stamp duty land tax: Rent: Variable or uncertain rent: NPV: Example 1
A ten year lease is granted on 1 April 2004. Annual rents are due per the table below:
The actual rent payable for years 1 to 5 will be taken into account for the purposes of the net present value (NPV) calculation.
The figure of rent to be used for years 6 to 10 is £70,000, being the highest rent payable in a consecutive period of 12 months in the first five years of the term of the lease.
The fact that the rent actually payable for years 6 to 10 is known (and exceeds £70,000) is not relevant for the purposes of calculating the NPV of variable rents.