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HMRC internal manual

# Calculation of stamp duty land tax: Rent: Variable or uncertain rent: NPV: Example 2

A ten year lease is granted on 1 April 2004 where the monthly rent changes every 10 months to give figures of rent as shown in the table below:

 Months 1 - 10 £4,000 per month Months 11 - 20 £4,250 per month Months 21 - 30 £3,900 per month Months 31 - 40 £4,250 per month Months 41 - 50 £5,000 per month Months 51 - 60 £3,900 per month Months 61 - 70 £4,500 per month Months 71 - 80 £4,750 per month Months 81 - 90 £4,550 per month Months 91 - 100 £4,250 per month Months 101 - 110 £4,900 per month Months 111 - 120 £4,700 per month

To determine the highest rent in a consecutive period of 12 months within the first five years of the term of the lease, it is necessary to look at the rent payable in months 1 - 60 in 12 month blocks in monthly increments:

 Months

1-12

2-13

3-14

etc

9-20

10-21

11-22

12-24

etc

30-41

31-42

32-43

etc

39-50

40-51

41-52

 Etc Calculation

10 x £4,000 + 2 x £4,250

9 x £4,000 + 3 x £4,250

8 x £4,000 + 4 x £4,250

etc

2 x £4,000 + 10 x £4,250

1 x £4,000 + 10 x £4,250 + 1 x £3,900

10 x £4,250 + 2 x £3,900

9 x £4,250 + 3 x £3,900

etc

1 x £3,900 + 10 x 4,250 + 1 x £5,000

10 x £4,250 + 2 x £5000

9 x £4,250 + 3 x £5,000

etc

2 x £4,250 + 10 x £5,000

1 x £4,250 + 10 x £5,000 + 1 x £3,900

10 x £5,000 + 2 x £3,900

 Etc Total

£48,500

£48,750

£49,000

etc

£50,500

£50,400

£50,300

£49,950

etc

£51,400

£52,500

£53,250

etc

£58,500

£58,150

£57,800

 etc

The period of 12 consecutive months with the highest rent is months 39 - 50 and the highest rent is £58,500. This figure of rent should be used for all the years 6 - 10 in the net present value calculation.