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HMRC internal manual

Stamp Duty Land Tax Manual

Calculation of stamp duty land tax: Lease premium: Relevant rental figure: Example 1

This page relates only to the calculation of the relevant rental figure for the purposes of calculating stamp duty land tax (SDLT) on premiums, under FA03/SCH5/PARA9 (2A) and (3). Where consideration for a lease is in the form of both premium and rental payments special provisions apply which mean that the nil rate band is not available in respect of the premium if the average annual rent (called the “relevant rental figure”) exceeds £1,000 per annum for mixed use or non-residential leases(see SDLTM18410). The rental figures used for determining net present value and for determining whether the nil rate band is available on the premium may be different- see SDLTM18455.

Example 1

A non-residential lease for 175 years is granted on 1 December 2009 for a premium of £90,000 and a ground rent of £200 per year. The ground rent does not change.

The relevant rental figure is £200 which does not exceed £1,000 so does not cause the non-residential threshold to be modified for the purposes of calculating tax on the premium.

No SDLT is payable on the premium as it is below the threshold of £150,000 for the 0% rate band for non-residential property. However, the transaction is notifiable as the lease is for seven years or more and chargeable consideration of not less than £40,000 has been given (see SDLTM18210).