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HMRC internal manual

Stamp Duty Land Tax Manual

Miscellaneous Provisions: ‘'Rent'’ payable for a period before grant: Example 1

A lease is granted on 1 July 2015 of a retail unit in a shopping centre, for a term of 5 years from 1 January 2015 at a rent of £45,000 per annum. The lease has not been substantially performed in advance of completion.

No rent is recoverable in respect of the pre-grant period (the earlier start date is merely to bring the lease term in line with other units owned by the same landlord). For the purposes of the net present value (NPV) calculation, the ‘rent’ for the period from 1 January 2015 to 30 June 2015 is ignored as it is not chargeable as rent.

The rent taken into account for the purpose of the NPV calculation is as follows.

Year 1 (1 July 2015 - 30 June 2016) £45,000
   
Year 2 (1 July 2016 - 30 June 2017) £45,000
Year 3 (1 July 2017 - 30 June 2018) £45,000
Year 4 (1 July 2018 - 30 June 2019) £45,000
Year 5 (1 July 2019 - 31 December 2019) £22,500

The term of the lease is 4 years 184 days from the date of the grant and it has an NPV of £184,232.