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HMRC internal manual

Stamp Duty Land Tax Manual

From
HM Revenue & Customs
Updated
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Notification: Grant of a lease

When a lease is granted (or a notional lease is treated as having been granted for example as a result of an extension or variation- see SDLTM17645), it should be notified to HM Revenue and Customs (HMRC) on form SDLT1 (and form SDLT4 if necessary) where:

* the lease (or deemed lease), when granted, is for a term of seven years or more and the grant is for chargeable consideration of £40,000 or more or the rent is more than £1,000. (see FA03/S77A and [SDLTM18000](https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm18000)) or
* the lease (or deemed lease), when assigned or surrendered is for a term of seven years or more and is for chargeable consideration of £40,000 or more. (see FA03/S77A and [SDLTM18000](https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm18000)) or
* the lease (or deemed lease) when granted, assigned or surrendered is for a term of less than seven years and tax is chargeable at a rate of 1% or higher on either or both of any premium or rent, or would be so chargeable but for the availability of a relief (see FA03/S77A (6) and [SDLTM18400](https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm18400)).

The return must be delivered to HMRC within 30 days of the effective date of the lease.

The date of grant of a formal lease in Scotland (i.e. the effective date of the lease) is the date of last execution of the lease. (NB In Scotland, unlike in England where it is normal to use counterparts for execution, the usual practice is for both parties to sign the same engrossed document. Accordingly, unless the parties meet to sign the document (which is very unusual), one party inevitably signs later than the other. Note also that, as a result, Scottish leases commonly bear two dates, being the actual dates of execution by the parties - the English practice of adding a “completion date” at the top of a lease is unknown in Scotland.)

The date of grant of a lease constituted by missives (which are not to be followed by a formal lease) is the date of conclusion of missives.

The date of grant (i.e. the effective date) of a notional lease is the date of last execution of the relevant document, e.g minute of variation or extension. (NB entering into missives for a variation or extension (which are not to be followed by a formal document executed by the parties) does not by itself create an effective date).

Where the formal lease is preceded by missives or an agreement for lease, substantial performance of the missives of let or agreement for lease is treated as the grant of a notional lease which may require to be notified.

The same applies to missives for a variation or extension, although it should be borne in mind that substantial performance does not take place until the expiry of the existing lease (see para 15013 onwards)