SolvedSchedule 5 | Stamp duty land tax: amount of tax chargeable: rent
From legislation.gov.uk
Introduction
(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 transaction.
Amounts payable in respect of periods before grant of leaseF1
(1A)For the purposes of this Part “rent” does not include any chargeable consideration for the grant of a lease that is payable in respect of a period before the grant of the lease.F1
Calculation of tax chargeable in respect of rent
(1)Tax is chargeable under this Schedule in respect of so much of the chargeable consideration as consists of rent.
(2)The tax chargeable is the total of the amounts produced by taking the relevant percentage of so much of the relevant rental value as falls within each rate band.F2
(3)The relevant percentages and rate bands are determined by reference to whether the relevant land—F2
(a)consists entirely of residential property (in which case Table A below applies), orF2
(b)consists of or includes land that is not residential property (in which case Table B below applies).F2F3F4
| Rate bands | Percentage |
|---|---|
| £0 to £125,000 | 0% |
| Over £125,000 | 1% |
| Rate bands | Percentage |
|---|---|
| £0 to £150,000 | 0% |
| Over £150,000 but not over £5 million | 1% |
| Over £5 million | 2% |
(4)For the purposes of sub-paragraphs (2) and (3)—F2
(a)the relevant rental value is the net present value of the rent payable over the term of the lease, andF2
(b)the relevant land is the land that is the subject of the lease.F2
(5)If the lease in question is one of a number of linked transactions for which the chargeable consideration consists of or includes rent, the above provisions are modified.F2
(6)In that case the tax chargeable is determined as follows.F2
First, calculate the amount of the tax that would be chargeable if the linked transactions were a single transaction, so that—
the relevant rental value is the total of the net present values of the rent payable over the terms of all the leases, and
the relevant land is all land that is the subject of any of those leases.
Then, multiply that amount by the fraction:NPVTNPVwhere—
NPV is the net present value of the rent payable over the term of the lease in question, and
TNPV is the total of the net present values of the rent payable over the terms of the all the 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:where—ri is the rent payable ... in respect of year i,i is the first, second, third, etc year of the term,n is the term of the lease ..., andT is the temporal discount rate (see paragraph 8).F5F6
Rent payable
(4)RepealedF7
Effect of provision for rent review
(5)RepealedF7
Term of lease
(6)RepealedF7
Treatment of lease for indefinite term
(7)RepealedF7
Temporal discount rate
(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 : generalF8
(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 consideration ....F9
(2)RepealedF10
(2A)RepealedF11
(3)RepealedF12
(4)Tax chargeable under this Schedule is in addition to any tax chargeable under section 55 or 74(1A) or Schedule 4A ... in respect of consideration other than rent.F13F14F15F16
(5)Where a transaction to which this Schedule applies falls to be taken into account for the purposes of section 55 ... as a linked transaction, no account shall be taken of rent in determining the relevant consideration.F17F18
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(9A)RepealedF19
Increase of rent treated as grant of new lease
(10)RepealedF20
Interpretation
(11)RepealedF21