SDLTM13205 - Calculation of Stamp Duty Land Tax (SDLT): Rent: Variable or uncertain rent: Example 2

A lease is granted on 1 January 2021 for a term of five years at a rent of £150,000 per annum with provision for a rent increase on 1 January 2023 to reflect the current market value

Year 1	£150,000
Year 2	£150,000
Years 3, 4 & 5	Market rent

As the rent for years 3, 4 and 5 is unascertainable as at the date of grant, a reasonable estimate of the market rent should be used by virtue of FA03/SCH17A/PARA7 and FA03/S51. The estimate is that the rent will be £160,000 for each of these years. A return is submitted by 15 January 2021.

The rent review is concluded on 1 July 2023 and the annual rent for years 3, 4 and 5 is adjusted to market rent of £165,000.

An amended return by way of a letter to Stamp Taxes is required by 31 July 2023, disclosing the NPV based on the actual figures. Payment of additional tax quoting the original UTRN should be made.