If the end date of the lease is known, the entire SDLT is due for the lease at that location. Within 14 days of the performance of a major benefit, a return of land transaction must be submitted and SDLT must be paid. It can be a tight schedule, especially if important performances came as a surprise. Stamp duty (SDLT) is sometimes due by tenants on rental contracts. The LTDS payable is based on the value of the lease calculated on the basis of the premium paid, the rent to be paid and the duration of the tenancy agreement. SDLT is more likely to be payable with medium- and long-term leases or for higher rents. SDLT liability is triggered on the effective date of the land transaction. SDLT must be paid within 14 days of that date to avoid interest and penalties. As a general rule, the effective date is either the date the contract is entered into, or in the event of a significant performance of a contract or lease, if it is earlier. For transactions with an effective date prior to March 1, 2019, a 30-day period applies. This exercise note does not cover leases and capital contracts. For more information on this topic, see exercise note: SDLT and outfit.
Despite the frequency with which leases are concluded, their SDLT treatment remains a mystery to many practitioners. Outdated errors and instructions in HMRC`s Stamp Duty Land Tax online manual don`t help. However, an analysis of the underlying legislation contained in the 2003 Finance Act (particularly Schedule 17A and Section 81A) provides a much simpler explanation. Where a lease is essentially executed, paragraph 12A considers that a fictitious lease has been granted for a substantial period of time for a period beginning on that date and expiring at the end of the actual lease. Once the lease itself is concluded, the consequences of SDLT depend on what has happened before. However, no tax on THE SDLT should be levied before the new lease is awarded, unless it is granted more than one year after the expiry of the old lease. If the new lease is granted more than a year later, an LTDS fee could be levied on each anniversary of the expiry of the old lease until the new lease is granted. If a lease is retained after the expiry of the period and a new lease is granted, the sdlt position can be complicated and advice must be sought. SDLT liability may arise in the company for a period before a new lease is awarded and interest may be outstanding. With regard to leases, sdlt is payable on each premium and rent, and there are different rules. However, the LTDS may be due for other payments made under the lease or for considerations other than cash, such as consent to construction work, for example.B.
