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HMRC internal manual

Stamp Duty Land Tax Manual

Variation of leases: Reducing the rent payable: Example 1

L grants a lease to T:

* of non-residential property
* on 1 December 2000
* for a term of 35 years
* at a rent of £650,000 per annum
* subject to upward only rent reviews every five years.

On 1 July 2005 T pays L £10,000,000 to reduce the rent for the remainder of the term to 1p.

A land transaction return and payment of £400,000 tax is required no later than 31 July 2005, as the payment by the tenant to the landlord to reduce the rent is liable to tax at 4% of £10,000,000.