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HMRC internal manual

Stamp Duty Land Tax Manual

Calculation of Stamp Duty Land Tax (SDLT): Rent: Variable or uncertain rent: Rent reviews

Where the terms of a lease provide for a rent review within the first five years, the rent is variable and uncertain at the date of grant. For the purposes of calculating net present value (NPV) for the first five years, a reasonable estimate should therefore be made of the amount payable (FA03/S51(2)). This need not necessarily be a professional valuation, but evidence of the basis of the estimate must be kept in case of query. Refer to SDLTM13150.

Where a rent review falls after the end of the fifth year of a lease term, it is disregarded for the purposes of calculating NPV. As the rent is variable, the NPV of years after the first five will be taken to be the figure of highest rent as set out in SDLTM13135.

This treatment applies equally to statutory rent reviews under the legislation governing agricultural tenancies (FA03/SCH17A/PARA7(4A)).

Refer to SDLTM13165 for details of when a review just within the first five years will be treated as falling after the end of the fifth year of the term.