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SDLTM50450 | Procedure: Leases that continue after a fixed term - FA03/Sch17A/Para3

From HM Revenue & Customs · Stamp Duty Land Tax Manual

The grant of a lease for a fixed term is notifiable (if required) as a lease for that term. If it continues after the fixed term, either as provided for in the lease or by operation of law, it is treated as a lease for a fixed period of one year longer than the original and if it continues after that year, two years longer etc.

When the lease continues after the end of a fixed term a further return, in the form of a letter to the Stamp Office, should be made within 30 days of the end of the term already notified or an SDLT1 within 14 days of when the lease first becomes notifiable.

1. Original transaction notified on SDLT1 but no tax due.

  • Lease continues after end of fixed term

  • Further return required having recalculated tax due based on a lease one year longer than the original

The letter should contain:

  • UTRN of the original return

  • Details of new tax calculation

  • Self assessment of tax now due

  • Payment of tax within 30 days of end of term already notified.

2. Original transaction notified and tax paid.

  • Lease continues after end of fixed term

  • Further return required having recalculated tax due based on a lease one year longer than the original

The letter should contain:

  • UTRN of the original return

  • Details of new tax calculation

  • Self assessment of tax now due

  • Payment of additional tax (i.e. new tax calculation less tax paid on original notification) within 30 days of end of term already notified.

3. Original transaction was not notifiable

  • Original return not notified as below notification threshold

  • Lease continues after end of fixed term

  • As a result of the continuation lease becomes notifiable

  • SDLT 1 and payment now required, effective date is the date of the original transaction (penalties will not be charged if return is made within 14 days of continuation which results in the requirement to notify).

Once a return has been submitted a letter should be sent to Stamp Office, containing the following details:

  • UTRN of the return

  • Details of tax calculation

  • Self assessment of tax now due