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HMRC internal manual

Stamp Duty Land Tax Manual

Chargeable Consideration: Rent

Chargeable consideration for a lease or other chargeable transaction which wholly or partly consists of rent is chargeable to stamp duty land tax (SDLT) on the ‘relevant rental value’. SDLT is also chargeable on any premium.

Whether consideration constitutes rent is a question of fact. Consideration may be treated as rent for SDLT purposes despite being described otherwise, for example as a licence fee in an agreement for lease. Conversely, in English law a service charge may be reserved as rent in the lease but not treated as such for SDLT purposes. (In fact, reserving service charge as rent is an English practice which has the effect of applying rules allowing recovery of that rent to service charge as well. There is no equivalent in Scotland, although sometimes the words “reserved as rent” are loosely used.

‘Rent’ does not include consideration payable before a new lease is granted. In some circumstances this may be taxed as a premium.

A nominal rent is not chargeable consideration for SDLT purposes if it:

* is expressed as a peppercorn or similar, or
* is less than £1 per annum.

It should be noted that peppercorn rents are rarely used in Scotland as it is not clear that a peppercorn amounts to rent, and it is not possible for a lease to be granted without rent.

Where the landlord has elected to waive exemption from VAT, the rent for SDLT purposes includes the VAT chargeable.


SDLTM17640 and SDLTM17645 for details of other chargeable transactions

SDLTM18455 for definition of relevant rental value

SDLTM18015 for treatment of service charges etc

SDLTM17110 and FA03/SCH5/PARA1A re: rent payable before lease granted

SDLTM18455 for definition of NPV