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HMRC internal manual

Stamp Duty Land Tax Manual

Variation of leases: Reducing the rent payable: Example 2

L grants a lease to T:

* of non-residential property
* at a rent of £100,000 a year
* for a term of 10 years
* with a tenant right to break at the fifth year.

In consideration of T agreeing not to exercise the break right, L agrees to reduce the rent to £80,000 a year.

Whether that agreement (not to exercise the break clause) is documented as a variation to the lease to remove the break right, or simply as a payment for T’s agreement not to exercise the right, there is an acquisition by T.

However T has not given any chargeable consideration for the acquisition (as the giving up of a right is not consideration in money or money’s worth under FA03/SCH4/PARA1). Therefore no stamp duty land tax is due and the transaction is not notifiable.