SDLTM16015 - Reliefs and Exemptions: Overlap relief: Example 1

A lease is granted on 1 April 2004 for 25 years (the old lease)

  • the date of expiry is 31 March 2029
  • rent of 拢144,000 per annum is payable under this old lease
  • the net present value (NPV) of the old lease is 拢2,373,337
  • stamp duty land tax (SDLT) of 拢22,233 is payable on the rent.

The old lease is surrendered and a new lease is granted on 1 April 2018 for 150 years

  • rent of 拢110,000 per annum is payable under this new lease
    • The overlap period is from 1 April 2018 until 31 March 2029, that is, 11 years
    • The rent payable under the new lease is 拢110,000
    • The rent payable under the old lease is 拢144,000. This is the amount included in the first NPV calculation
    • The new lease is not a lease with variable rent and so FA03/SCH17A/PARA7 is not in point. The NPV calculation should use rent of 拢0 for years 1 to 11 inclusive (as the old rent is more than the new rent but the figure to be included in the calculation cannot be less than 拢0) and rent of 拢110,000 for years 12 to 150 inclusive.
    • The calculator will not cope with this calculation and it should be performed manually.