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HMRC internal manual

Stamp Duty Land Tax Manual

Miscellaneous Provisions: Lease Assignments: Treated as new lease

If the grant of a lease (that is, the original lease) is exempt from charge under any of the following

FA03/S57A - sale and leaseback arrangements

FA03/SCH7/PART1 - group relief

FA03/SCH7/PART2 - reconstruction and acquisition relief

FA03/S66 - transfers involving public bodies

FA03/SCH8 - charities relief

FA03/S123(3) - regulations reproducing in relation to SDLT the effect of enactments providing for exemption from stamp duty (SI 2003/2867)

Paragraphs 6 and 8 of Part 3 of Schedule 61 to the Finance Act 2009 (alternative finance investment bond relief)

Part 1 or 2 of Schedule 7A (PAIF seeding relief and COACS seeding relief

then the first assignment of the lease that is not exempt under any of the above provisions is treated as the grant of a lease by the assignor - FA03/SCH17A/PARA11

Any such deemed grant is treated as being for a term equal to the unexpired term of the original lease and on conditions (for example, rent and review periods) equal to those on which the assignee holds that lease after assignment.

Any capital amount paid for the assignment is chargeable in addition to any charge underFA03/SCH17A/PARA11.

FA03/SCH17A/PARA11 does not apply where

  • group relief
  • reconstruction and acquisition relief or
  • charities relief
  • PAIF seeding relief, COACS seeding relief

is withdrawn due to a disqualifying event occurring before the effective date of theassignment. Refer to [
If the grant of a lease (that is, the original lease) is exempt from charge under any of the following

FA03/S57A - sale and leaseback arrangements

FA03/SCH7/PART1 - group relief

FA03/SCH7/PART2 - reconstruction and acquisition relief

FA03/S66 - transfers involving public bodies

FA03/SCH8 - charities relief

FA03/S123(3) - regulations reproducing in relation to SDLT the effect of enactments providing for exemption from stamp duty (SI 2003/2867)

Paragraphs 6 and 8 of Part 3 of Schedule 61 to the Finance Act 2009 (alternative finance investment bond relief)

Part 1 or 2 of Schedule 7A (PAIF seeding relief and COACS seeding relief

then the first assignment of the lease that is not exempt under any of the above provisions is treated as the grant of a lease by the assignor - FA03/SCH17A/PARA11

Any such deemed grant is treated as being for a term equal to the unexpired term of the original lease and on conditions (for example, rent and review periods) equal to those on which the assignee holds that lease after assignment.

Any capital amount paid for the assignment is chargeable in addition to any charge underFA03/SCH17A/PARA11.

FA03/SCH17A/PARA11 does not apply where

  • group relief
  • reconstruction and acquisition relief or
  • charities relief
  • PAIF seeding relief, COACS seeding relief

is withdrawn due to a disqualifying event occurring before the effective date of theassignment. Refer to](https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm23000) and SDLTM26000.

This provision will only apply where the initial grant of the lease was or would otherwisehave been subject to SDLT.

Example 1

  • A Ltd grants its subsidiary, B Ltd, a lease for a term of 25 years and B Ltd claims group relief on the grant
  • after one year B Ltd assigns this lease to C Ltd, an unconnected third party

As the lease benefited from a relief at the previous transaction, (the grant by A Ltd to B Ltd), the assignment is treated as the grant of a lease for 24 years, this being the remainder of the original term. This transaction is treated as the grant of a new lease by B Ltd to C Ltd for notification purposes.

C Ltd would have to file a land transaction return and pay SDLT on the net present value of the remaining rent as for a normal grant and on any capital sum paid to B Ltd for the assignment.

Example 2

  • A Ltd grants a lease to an unconnected company B Ltd
  • B Ltd pays stamp duty land tax on the chargeable consideration of the new lease
  • B Ltd subsequently assigns this lease to C Ltd

As the lease hasn’t been subject to a relief claim in respect of the previous transaction (the grant from A Ltd to B Ltd), the assignment from B Ltd to C Ltd is not treated as the grant of a new lease.

Any capital sum paid to B Ltd is chargeable to stamp duty land tax.