beta This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Stamp Duty Land Tax Manual

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.