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HMRC internal manual

Stamp Duty Land Tax Manual

HM Revenue & Customs
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Calculation of stamp duty land tax: Rent: Net present value

To calculate the net present value (NPV) of rents for stamp duty land tax purposes the following steps must be followed. If the landlord has elected to waive exemption the rent inclusive of VAT must be used:-

1. Find the amount of rent payable in respect of each of the first five years of the term of the lease (or for each year of the term if shorter than five years). If there is a rent free period, treat the rent for that period as zero (regardless of whether the rent free period is dealt with in the lease or agreed separately).
2. If any of the rent payable in respect of this period cannot be determined at the date of grant (for example if it depends fully or to some extent on turnover, or on some contingency), then make a reasonable estimate of what you expect each year’s rent to be, in accordance with FA03/S51(1) and FA03/S51(2) (see [SDLTM18505](
3. Calculate the highest rent payable in any continuous twelve month period. This will usually, but not always, be the highest annual rent payable.
4. This highest rent amount should be used as the rent payable for all years after the first five for the rest of the term of the lease, irrespective of what rent is actually payable for this period
5. Calculate the NPV of the rent payable for each year of the lease term, using either the lease duty calculator provided on the Stamp Office website at or the formula at FA03/SCH5/PARA3. The figures of NPV for each year are then aggregated to give a total NPV for the rent over the lease term. An example of a manual calculation is provided at [SDLTM18460](

If any estimates have been used, additional SDLT returns may have to be submitted once the actual figures are known.

Additional SDLT returns may also be necessary:-

* if the abnormal rent increase provisions apply to an increase in rent;
* if the lease is varied or extended, whether formally or by tacit relocation; or
* if a lease is subsequently granted which is linked, such that the successive linked lease provisions apply.

The fact that the landlord could elect to waive exemption from VAT during the term of the lease does not mean that the rent payable is treated as being uncertain.