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HMRC internal manual

Stamp Duty Land Tax Manual

Term of a lease: Leases for a fixed term

For the purposes of stamp duty land tax (SDLT), a lease for a definite or fixed term is one whose term can be ascertained (either from the wording of the lease itself or from some ancillary document such as an agreement for lease or certificate of practical completion). This includes a lease worded so that it ends on a specific date or one where the term is a specific length of time from the date of grant.

The term of a lease for a fixed term is the contractual or express term specified in the lease.

In England, the term of a lease for a fixed term is taken to be:

the contractual (or ‘express’) term specified in the lease or, if shorter,

the period from and including the date of the grant of the lease until the end of the contractual term.

This is based on the English law principle established in the case of Bradshaw v Pawley [1980] 1 WLR 10.

Any contingency which would cause a lease to terminate before the end of the contractual term or any right of any party to terminate or renew the lease is ignored for the purposes of ascertaining the term for calculating the initial charge to SDLT. See FA03/SCH17A/PARA2(a).

For details of the tax implications of the subsequent termination or renewal of a lease, see SDLTM18735 and SDLTM18740 respectively.