Calculation of stamp duty land tax: Rent: Variable or uncertain rent: Example 3
A lease is granted on 1 January 2008 for ten years at a rent of £100,000 per annum rising to £130,000 per annum on 1 January 2012 and to £140,000 per annum on 1 January 2016.
The rent payable for each of the first five years is:
The actual rent payable for years 6 - 10 is ignored for the calculation of the net present value (NPV). Instead the highest rent paid in any period of twelve months within the first five years is used. In this example the rent used for years 6 - 10 in calculating the NPV will be £130,000 p.a. The rent increase in year 9 is ignored for the purposes of the calculation, as it is outside the first five-year period.
There will be no need to submit a revised return at the end of year 5, as there are no estimated or contingent figures contained in the original calculation.
However, see SDLTM18620 in considering whether the rent increase in year 9 represents an abnormal increase.