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HMRC internal manual

Stamp Duty Land Tax Manual

From
HM Revenue & Customs
Updated
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Calculation of Stamp Duty Land Tax (SDLT): Rent: Variable or uncertain rent: Five-year rent reviews

Under FA03/SCH17A/PARA7A, a rent review is treated as falling after the end of the fifth year of the lease term, so is effectively disregarded for stamp duty land tax purposes, if:

  • it is the first or only review
  • review is to an amount which is unascertainable in advance (e.g. market rent)
  • the review date is five years after a specified date (e.g. ‘start date’ of lease predating grant), and
  • the specified date falls within three months before the beginning of the lease term.

The outcome of the first rent review during the term of a lease will therefore be ignored if that rent review is after the date 4 years and 9 months from the start of the lease term.

The legislation refers to a ‘specified date’ so this provision only applies where the five-year review is provided for in the terms of the lease. However in practice HM Revenue & Customs accepts that the provision applies to any reviews falling within the last three months of the fifth year of the lease.