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HMRC internal manual

Stamp Duty Land Tax Manual

Variation of leases: Minute of extension and variation

Leases in Scotland are frequently varied by the execution of a minute which both increases the rent and extends the term. For SDLT purposes, the extension and/or variation of a lease will be treated as the grant of a new lease.

If the rent is varied within the first five years of the lease (but not under the terms of a rent review clause, which would be taken into account in calculation of the NPV), a minute of variation and extension of a lease is likely to give rise to two deemed leases for SDLT purposes.

The successive linked lease provisions in FA03/SCH17A/PARA5 apply to the two leases.

Therefore (i) both elements are dealt with on a single land transaction return under the successive linked lease provisions and (ii) the two deemed new leases are treated as the grant of a single lease, at the time of the grant of the first deemed lease, for a term equal to the aggregate of the terms of both of the deemed leases and in consideration of the rent payable under both of the deemed leases