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HMRC internal manual

Stamp Duty Land Tax Manual

Term of a lease: Leases continuing by tacit relocation after initial fixed term

In Scotland, a lease which comes to the end of its express term shall (if the requisite notice to quit or to remove is not given) continue a year at a time by virtue of the doctrine of tacit relocation (until either party serves the appropriate notice).

(NB - if the term of the original lease was less than one year, tacit relocation renews it only for a period equivalent to the original term - but as explained in the next paragraph, nonetheless for SDLT purposes it is deemed to continue for a year.)

Under FA03/SCH17A/PARA3 these leases are treated for SDLT purposes as being for one year longer than the original term.

Where the increased NPV of the extended lease gives rise to a charge or additional charge to SDLT, a return or further return is required. This should be submitted by letter to the Birmingham Stamp Office within 30 days of the day after expiry of the original lease.

If the lease continues by tacit relocation after this one year extension, it is treated as being extended by another year and so on until either a new lease is granted or appropriate notice is service to terminate the lease. In these cases, if a return or further return is required it should be submitted by letter to Birmingham Stamp Office (HMRC website) within 30 days after expiry of the previous lease (that is 1 year, 2 years etc after the end of the contractual term of the original lease).

Leases granted before 1 December 2003

Where a charge or additional charge to SDLT would arise merely because of the extended term of a lease under this legislation, it does not apply to leases granted before 1 December 2003 which were taxable under stamp duty.