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HMRC internal manual

Stamp Duty Land Tax Manual

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HM Revenue & Customs
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Miscellaneous provisions: Linked leases: Single scheme: Pre-implementation: Example

A lease is granted on 1 November 2003 (shop 1) and is linked to a lease of different premises (shop 2) that is granted on 1 June 2005. Both leases are non-residential.

The leases are of different premises and are not ‘successive’ linked leases, but on the facts are found to be linked as a ‘single scheme’ under FA03/S108.

1. Calculate the total tax that would be chargeable on shop 1 if the linked transactions were a single transaction:

1. net present value (NPV) of shop 1 = say £80,000 (NPV1). (Although NPV is not a concept for leases granted under stamp duty, it must be taken into account in determining tax due on a linked lease which is, itself, subject to stamp duty land tax (SDLT). The calculator cannot calculate the NPV of a lease granted pre-SDLT, so this will have to be done manually.)
2. calculate the NPV of shop 2, say £120,000 (NPV2).
3. aggregate the NPVs to give total NPV (TNPV) = £200,000
4. Ignore tax that would be chargeable on shop 1 as this was a stamp duty lease.

1. Calculate the total tax that would be chargeable on shop 2 if the linked transactions were a single transaction:

1. Calculate TNPV as above: £200,000
2. Total tax that would be chargeable on shop 2: £200,000 less threshold applicable as at 1 June 2005:

 
  £150,000/£50,000  
     
1. Apportion the total tax in proportion to the individual NPVs of the leases, in this case 80: 120. So £200 is apportioned to shop 1 (but no tax implications under SDLT) and £300 tax is due in respect of shop 2. For notification purposes, effective date is 1 June 2005.