SolvedSDLTM13215 | Calculation of stamp duty: Rent: Variable or uncertain rent: Example 4
From HM Revenue & Customs · Stamp Duty Land Tax Manual
A lease for a term of four years is granted on 1 April 2018, with an initial rent of£100,000 per annum which is increased by 4% per year.
The net present value (NPV) of this lease is calculated on the basis of the rent increasesfor each year as they are:
known at the date of grant;
within the first five years of the term of the lease; and
not calculated in line with RPI
The figures of rent for the NPV calculation are therefore:
| Year 1 | £100,000 |
|---|---|
| Year 2 | £104,000 |
| Year 3 | £108,160 |
| Year 4 | £112,486 |
The calculation will not require review because the known rent increases are included inthe original NPV calculation and are not estimated or contingent.