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HMRC internal manual

Stamp Duty Land Tax Manual

HM Revenue & Customs
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Calculation of stamp duty: Rent: Variable or uncertain rent: Example 7

A lease is granted for a term of seven years with a market rent revision after four years.

The original land transaction return includes the Net Present Value (NPV) of

  • the known rent in years one to four
  • a reasonable estimate of the market rent for year five
  • the highest rent (known or estimated) for any twelve - month period in the first five years, for years six and seven.

Once the rent is determined on review at year four, or at year five if the rent is not determined sooner, an amended return should be made by way of a letter to The Compliance Team, Birmingham Stamp Office, (this address is available within the contact us pages of the HMRC website) including a NPV calculation with:

  • the known rent in years one to four
  • the revised rent for year five (actual, or a reconsidered estimate if not determined)
  • a revised calculation of the highest rent payable in any twelve - month period in the first five years for years six and seven (if necessary).

Stamp duty land tax is charged on the revised NPV with credit given for the tax paid on the original return, or a refund is made, from thirty days after the date all uncertainty is determined.