(2) Where sub-paragraph (1) applies in relation to an obligation, a payment
made in discharge of the obligation does not count as chargeable
(3) The assumption or (as the case may be) release of any such obligation as is
mentioned in sub-paragraph (1) does not count as chargeable consideration
in relation to the assignment or surrender of the lease.
Surrender of existing lease in return for new lease
14 (1) This paragraph applies where a lease is granted in consideration of the
surrender of an existing lease—
(a) of the same or substantially the same premises,
(b) of which the unexpired term is substantially the same as the term of
the new lease, and
(c) on the same or substantially the same terms.
(2) Where this paragraph applies—
(a) the grant of the new lease does not count as chargeable consideration
for the surrender, and
(b) the surrender does not count as chargeable consideration for the
grant of the new lease.
15 (1) In the case of the grant, assignment or surrender of a lease a reverse
premium does not count as chargeable consideration.
(2) A “reverse premium” means—
(a) in relation to the grant of a lease, a premium moving from the
landlord to the tenant;
(b) in relation to the assignment of a lease, a premium moving from the
assignor to the assignee;
(c) in relation to the surrender of a lease, a premium moving from the
tenant to the landlord.
Indemnity given by purchaser
16 Where the purchaser agrees to indemnify the vendor in respect of liability to
a third party arising from breach of an obligation owed by the vendor in
relation to the land that is the subject of the transaction, neither the
agreement nor any payment made in pursuance of it counts as chargeable
Stamp duty land tax: amount of tax chargeable: rent
1 This Schedule provides for calculating the tax chargeable—
(a) in respect of a chargeable transaction for which the chargeable
consideration consists of or includes rent, or
(b) where such a transaction is to be taken into account as a linked
Calculation of tax chargeable in respect of rent
2 (1) Tax is chargeable under this Schedule in respect of so much of the chargeable
consideration as consists of rent.
(2) The tax so chargeable is a percentage of the net present value of the rent
payable over the term of the lease.
(3) That percentage is determined by reference to whether the relevant land—
(a) consists entirely of residential property (in which case Table A below
(b) consists of or includes land that is not residential property (in which
case Table B below applies),
and, in either case, by reference to the amount of the relevant rental value.
Table A: Residential
Relevant rental value
Not more than £60,000
More than £60,000
Table B: Non-residential or mixed
Relevant rental value
Not more than £150,000
More than £150,000
(4) For the purposes of sub-paragraph (3)—
(a) the relevant land is the land that is the subject of the lease, and
(b) the relevant rental value is the net present value of the rent payable
over the term of the lease,
subject as follows.
(5) If the lease in question is one of a number of linked transactions for which
the chargeable consideration consists of or includes rent—
(a) the relevant land is any land that is the subject of any of those leases,
(b) the relevant rental value is the total of the net present values of the
rent payable over the terms of those leases.
Net present value of rent payable over term of lease
3 The net present value (v) of the rent payable over the term of a lease is
calculated by applying the formula:
ri is the rent payable (see paragraphs 4 and 5) in year i,
i is the first, second, third, etc year of the term,
n is the term of the lease (see paragraphs 6 and 7), and
T is the temporal discount rate (see paragraph 8).
4 (1) For the purposes of this Schedule a single sum expressed to be payable in
respect of rent, or expressed to be payable in respect of rent and other
matters but not apportioned, shall be treated as entirely rent.
This is without prejudice to the application of paragraph 4 of Schedule 4
(chargeable consideration: just and reasonable apportionment) where
separate sums are expressed to be payable in respect of rent and other
(2) Subject to paragraph 5 (effect of provision for rent review), section 51
(contingent, uncertain or unascertained consideration) applies in relation to
rent as in relation to other chargeable consideration, but no application may
be made under section 90 (application to defer payment in case of contingent
or uncertain consideration) in respect of tax chargeable under this Schedule.
(3) No account shall be taken for the purposes of this Schedule of any provision
for rent to be adjusted in line with the retail price index.
Effect of provision for rent review
5 (1) This paragraph applies where the lease contains provision for adjustment of
the rent, as from a specified date or dates, to reflect current market values.
(2) In this paragraph—
(a) a “rent review” means an adjustment in pursuance of such provision,
(b) references to the date of a rent review are to the date from which any
such adjustment has or would have effect.
(3) If the lease provides for a rent review on or before the end of the second year
of the lease, section 51 (contingent, uncertain or unascertained
consideration) applies in relation to the possibility that the rent may be
adjusted on that review.
(4) If the lease provides for a rent review after the end of the second year of the
lease, the annual rent payable after that review—
(a) is determined without regard to the possibility of an adjustment on
that review, and
(b) is assumed to be the same as the annual rent payable over the year
preceding the first rent review or, if the period from the beginning of
the term of the lease to the date of the first rent review is less than a
year, over that period.
Term of lease
6 (1) For the purposes of this Schedule the term of a lease is determined as
(2) Subject to the following provisions of this paragraph, the term of a lease is—
(a) the contractual term specified in the lease, or
(b) if shorter, the period from the date of the grant of the lease until the
end of the contractual term.
(3) Where in England and Wales or Northern Ireland—
(a) an agreement for a lease is entered into,
(b) the agreement is substantially performed otherwise than by
(c) a lease is subsequently granted in pursuance of the agreement,
the term of a lease is the period from the date of substantial performance of
the agreement until the end of the contractual term specified in the lease.
In this sub-paragraph “substantially performed” and “completion” have the
same meanings as in section 44 (contract and conveyance).
(4) Notwithstanding anything in sub-paragraph (2) or (3), a lease granted by
way of renewal of a previous lease is treated as if its term had begun on the
expiry of the previous lease.
This applies, in particular, to leases granted under Part 2 of the Landlord and
Tenant Act 1954 (c. 56) or under the Business Tenancies (Northern Ireland)
Order 1996 (S.I. 1996/725 (N.I. 5)).
(5) No account shall be taken of any right of either party to determine the lease
or to renew it.
Treatment of lease for indefinite term
7 (1) For the purposes of this Schedule a lease for an indefinite term is treated as
if it were a lease for a term of 12 years.
(2) Sub-paragraph (1) applies, in particular, to a lease expressed to be—
(b) for life, or
(c) determinable on the marriage of the lessee.
(3) No account shall be taken for the purposes of this Schedule of any statutory
provision deeming such a lease to be a lease for a longer definite term.
Temporal discount rate
8 (1) For the purposes of this Schedule the “temporal discount rate” is 3.5% or
such other rate as may be specified by regulations made by the Treasury.
(2) Regulations under this paragraph may make any such provision as is
mentioned in subsection (3)(b) to (f) of section 178 of the Finance Act 1989
(c. 26) (power of Treasury to set rates of interest).
(3) Subsection (5) of that section (power of Inland Revenue to specify rate by
order in certain circumstances) applies in relation to regulations under this
paragraph as it applies in relation to regulations under that section.
Tax chargeable in respect of consideration other than rent
9 (1) Where in the case of a transaction to which this Schedule applies there is
chargeable consideration other than rent, the provisions of this Part apply in
relation to that consideration as in relation to other chargeable
(2) If the annual rent exceeds £600 a year, the 0% band in the Tables in
subsection (2) of section 55 does not apply and any case that would have
fallen within that band is treated as falling within the 1% band.
(3) For the purposes of sub-paragraph (2) the “annual rent” means the average
annual rent over the term of the lease or, if—
(a) different amounts of rent are payable for different parts of the term,
(b) those amounts (or any of them) are ascertainable at the effective date
of the transaction,
the average annual rent over the period for which the highest ascertainable
rent is payable.
(4) Tax chargeable under this Schedule is in addition to any tax chargeable
under section 55 in respect of consideration other than rent.
(5) Where a transaction to which this Schedule applies falls to be taken into
account for the purposes of that section as a linked transaction, no account
shall be taken of rent in determining the relevant consideration.
Increase of rent treated as grant of new lease
10 (1) Where a lease is varied so as to increase the amount of the rent, the variation
is treated for the purposes of this Schedule as if it were the grant of a lease in
consideration of the additional rent made payable by it.
(2) Sub-paragraph (1) does not apply to an increase of rent in pursuance of a
provision already contained in the lease.
11 In Scotland any reference in this Part to the term of a lease is to the period of