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HMRC internal manual

Stamp Duty Land Tax Manual

Term of a lease: Surrender of existing lease and grant of new lease to increase the term and/or increase the rent

A lease in Scotland may be extended and/or its rent may be increased by way of a renunciation of the existing lease and the grant of a new lease (for the unexpired term of the original lease plus the extension period.

Where a lease is renounced/surrendered and a new lease granted, SDLT is payable on the NPV of the new lease, but with the rent element reduced during the overlap period by the rent already taken into account for SDLT purposes (see SDLTM19310).

However, if the original lease was granted (or treated as granted) before 1 December 2003 (that is, under stamp duty), then the overlap relief does not apply and there is no reduction of rental on the new lease.