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SDLTM50550 | Procedure: Lease for indefinite term - FA03/Sch17A/Para4

From HM Revenue & Customs · Stamp Duty Land Tax Manual

The grant of a lease for an indefinite term is taxed as a lease for a fixed term of one year. If it continues after the end of that first year, it is taxed as a lease for a fixed term of two years and so on.

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

  • Lease continues after end of first year

  • Further return required having recalculated tax due based on a lease for 2 years (and on subsequent anniversaries, for the appropriate term)

  • The return is made by way of a letter to Stamp Office and should contain:

- UTRN of the original return

- Details of new tax calculation

- Self assessment of tax now due

- Payment of any tax within 30 days of end of term already notified

  1. Original transaction notified and tax paid.

  • Original return notified and tax paid

  • Lease continues after term notified

  • Further return required having recalculated tax due based on a lease for 1 year longer than already notified

  • The return is made by way of a letter to the Stamp Office and should contain:

- UTRN of the original return

- Details of new tax calculation

- Self assessment of additional tax now due

- Payment of tax within 30 days of end of term already notified

  1. Original transaction was not notifiable

  • Original return not notified as below notification threshold

  • Lease continues after end of first year

  • As a result of the continuation the lease now becomes notifiable

  • SDLT 1 now required, effective date is the date of the original grant (penalties will not be charged if return is made within 30 days of continuation which leads to the requirement to notify), this should be sent to the Stamp Office, accompanied by a letter containing the following:

- Details of new tax calculation

- Self assessment of tax now due

- Payment of any tax within 30 days of end of the term that did not previously need to be notified

- From 1 March 2019, where as a result of a continuation, a lease becomes notifiable for the first time, the return must be made and tax due paid within 14 days of the end of the latest period of continuation.