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HMRC internal manual

Stamp Duty Land Tax Manual

From
HM Revenue & Customs
Updated
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Calculation of stamp duty land tax: Rent: Variable or uncertain rent: Example 4

A lease for a term of four years is granted on 1 April 2004, with an initial rent of £100,000 per annum which increases by 4% per year.

The net present value (NPV) of this lease is calculated on the basis of the rent increases for each year as they are:

* known at the date of grant;
* within the first five years of the term of the lease; and
* not calculated in line with RPI.

The figures of rent for the NPV calculation are therefore:

Year 1 £100,000
   
Year 2 £104,000
Year 3 £108,160
Year 4 £112,486

The calculation will not require review because the known rent increases are included in the original NPV calculation and are not estimated or contingent.