Reliefs and Exemptions: Overlap relief: Example 5
A lease is granted on 1 April 2004 for 25 years (the old lease)
* the date of expiry is 31 March 2029 * initial rent of £144,000 per annum is payable under this old lease * the lease contains a provision for a rent review to higher of market rent or passing rent with effect from 1 April 2009 and every fifth anniversary thereafter
The old lease is surrendered and a new lease is granted on 1 April 2008 for 150 years
* rent of £110,000 per annum is payable under this new lease * there is no provision for rent reviews 1. As the rent review is after five years, it is ignored (refer to [SDLTM13160](https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm13160)). The net present value (NPV) of the old lease is £2,373,337 2. The overlap period is from 1 April 2008 until 31 March 2029, that is, 21 years 3. The rent payable under the new lease is £110,000 4. The rent payable under the old lease is £144,000. This is the amount included in the first NPV calculation 5. 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 £0 for years 1 to 21 inclusive (as the old rent is more than the new rent but the figure to be included in the calculation cannot be less than £0) and rent of £110,000 for years 22 to 150 inclusive to give NPV of £1,508,038 and stamp duty land tax due of £13,580. 6. The calculator will not cope with this calculation and it should be performed manually.