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HMRC internal manual

Stamp Duty Land Tax Manual

Processing: Further guidance for completing forms SDLT1, SDLT3 and SDLT4: Further guidance for question 2 SDLT1, descriptions of transactions

This is question 2 on the paper SDLT1. It will be described as 1.2 if the option to show the question number has been selected on the HMRC online system or software from your IT supplier.

You must answer this question with one of four options, F, L, A or O

F - Conveyance/Transfer

  • in England, Wales and Northern Ireland, for every transfer of a freehold (whether legal or equitable, and including commonhold)
  • in Scotland, for every transfer of ownership of land
  • except where the freehold or ownership of land is subject to a lease, in which case code A applies (see below)

L - Grant of Lease

Code L covers the grant of a new lease, including an overriding lease, or of a replacement lease where a previous lease expired or ended for any reason. In Scotland, it includes the exchange of missives of let, which are not to be completed by the grant of a formal lease. Variations of leases are (with two exceptions, see code O below) land transactions equivalent to the grant of a new lease and are to be allocated code L. These include:

  • variations of a lease which result in an increase of rent (see code O below for variations which reduce the rent or term)
  • ‘variations’ (in England, Wales and Northern Ireland only) which give rise to a surrender and re-grant by operation of law
  • ‘variations’ in Scotland which extend the period of the lease and take effect, for Stamp Duty Land Tax purposes, as a new lease.

Code L covers all cases where tax is chargeable on the rental or premium element of a new lease. If notifying on a form SDLT1 you must also answer questions 16 to 25. If notifying online you will be asked the appropriate questions.

For more information on variations of leases go to SDLTM15010 

A - Any other transaction where there is a lease involved

Code A must be used for all other transactions where there is a lease involved, including where consideration has been given for:

  • the assignment or assignation of an existing lease
  • the transfer of a freehold (in Scotland, ownership of land) which is itself subject to a lease or leases
  • the surrender or renunciation of a lease by a tenant
  • the acquisition of a freehold or leasehold reversion by a tenant.

For code A it is essential that you supply further information in the section About Leases. You must answer questions 16 to 21 but not questions 22 to 25. If notifying online you will be asked the appropriate questions.

O - Other

Code O includes all acquisitions of interests apart from those listed under A, F or L. Examples are:

  • the acquisition of an easement or servitude
  • the acquisition of sporting rights
  • variation of a lease to reduce the rent payable
  • variation of a lease to reduce the term of the lease if a return is required from the lessor

For transactions within code O you only need to complete a return on form SDLT1 and notify us of the acquisition if SDLT is chargeable at 1% or more.

Leave questions 16 to 25 blank for all transactions within code O.