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HMRC internal manual

Stamp Duty Land Tax Manual

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HM Revenue & Customs
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Term of a lease: Backdated lease granted after holding over

Where:

  • the grant of a lease was chargeable to stamp duty land tax (SDLT) rather than stamp duty;
  • the tenant continues in occupation after the date on which the lease, under its original terms, would terminate (the contractual termination date);
  • the tenant is granted a new lease of the same or substantially the same premises;
  • the term of the new lease is expressed to begin on or immediately after the contractual termination date; and
  • the date of grant of the new lease is on or after 19 July 2006,

then under FA03/SCH17A/PARA9A the term of the new lease is treated for SDLT purposes as beginning on the date on which it is expressed to begin (in other words the normal Bradshaw v Pawley principle does not apply- refer to SDLTM14015). Any rent payable in respect of the period between the contractual termination date and the actual date of grant of the new lease will be eligible for relief in the same way as for ‘overlap relief’ where the above criteria are met (refer to SDLTM16010 to SDLTM16035).

Non-qualifying leases are unlikely to suffer a double charge to SDLT as in most cases rent payable for the holding over period will be consideration for occupation under the old lease. Where the old lease was chargeable to stamp duty, refer to SDLTM14100.For other leases, a charge to SDLT may arise where an increase in rent amounts to avariation under FA03/SCH17A/PARA13.