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HMRC internal manual

Stamp Duty Land Tax Manual

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HM Revenue & Customs
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Calculation of stamp duty land tax: Rent: Variable or uncertain rent: Rent reviews

Where the terms of a lease provide for a rent review within the first five years, the rent is variable and uncertain at the date of grant. For the purposes of calculating net present value (NPV) for the first five years, a reasonable estimate should therefore be made of the amount payable - FA03/S51(2). This need not necessarily be a professional valuation, but evidence of the basis of the estimate must be kept in case of query. See SDLTM18520. NB If the rent review is determined within the first five years, it may be necessary to make a further return (see SDLTM18525).

Where a rent review falls after the end of the fifth year of a lease term (ie it relates to rent payable after the end of the fifth year), it is disregarded for the purposes of calculating NPV. As the rent is variable, the NPV of years after the first five will be taken to be the figure of highest rent as set out in SDLTM18505. NB Where rent is increased as a result of a rent review after the end of the fifth year of a lease term, the abnormal rent increase provisions may apply (see SDLTM18620).

This treatment applies equally to statutory rent reviews under the legislation governing agricultural leases (FA03/SCH17A/PARA7(4A)).

See SDLTM18535 for details of when a review just within the first five years will be treated as falling after the end of the fifth year of the term