beta This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Stamp Duty Land Tax Manual

Reliefs and Exemptions: Overlap relief: Example 2

A lease is granted on 1 April 2004 for 25 years (the old lease)

  • the date of expiry is 31 March 2029
  • rent of £144,000 per annum is payable under this old lease
  • net present value (NPV) of the old lease is £2,373,337
  • stamp duty land tax (SDLT) of £22,233 is payable on the rent.

The old lease is surrendered and a new lease granted 1 April 2018 for 150 years

  • rent of £175,000 per annum is payable under this new lease
  1. The overlap period is from 1 April 2018 until 31 March 2029, that is, 11 years
     
  2. The rent payable under the new lease is £175,000
     
  3. The rent payable under the old lease is £144,000. This is the amount included in the first NPV calculation

The calculator will not cope with this calculation and it should be performed manually.

The new lease is not a lease with variable rent and so FA03/SCH17A/PARA7 is not in point. The NPV calculation should use rent of £31,000 for years 1 to 11 inclusive (being new rent £175,000 less old rent £144,000) and rent of £175,000 for years 12 to 150 inclusive.

The calculator will not cope with this calculation and it should be preformed manually