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HMRC internal manual

Stamp Duty Land Tax Manual

Calculation of stamp duty land tax: Lease premium: Relevant rental figure: Example 2

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 (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 SDLTM13075.

Example 2

A non-residential lease for 175 years is granted on 1 December 2008 for a premium of £90,000 and a ground rent of £750 per year. The ground rent does not change.

The relevant rental figure is the same as the annual rent in this case, i.e. £750. As this is less than £1,000, the 0% threshold is available for the purposes of calculating tax on the premium.