Calculation of stamp duty land tax: Rent: Variable or uncertain rent: Five-year rent reviews: Example 3
An agreement for lease is entered into on 1 January 2004 for a rent of £100,000 per annum subject to review to market rent at 1 January 2009. It is substantially performed on 1 January 2004 so is treated as the grant of a notional lease.
On 1 January 2006 a lease is granted pursuant to the agreement, which is regarded as the surrender of the notional lease under the agreement and a re-grant (see SDLTM17640 for details).
Although in England for the purposes of FA03/SCH17A/PARA7A, the re-grant ‘re-starts the clock’ in terms of the time limit for the provisions in Scotland the term of a lease can be backdated to a date before the date of grant, ie to the date of entry. Consequently the rent review is not within the first five years and the rent review can be ignored.