HMRC has issued a consultation on various proposed changes to the filing and payment process – in particular a reduction in the time limit for filing and payment from 30 days to 14...23 September 2016
Taxing Variations? Part One- SDLT on Lease Variations
- A variation to increase the rent in the first five years of the term is treated as if it were the grant of a new lease in consideration of the additional rent. SDLT is payable by reference to the increase in rent.
- Some variations will result in a deemed surrender and re-grant of the lease, which may be an unintentional consequence of the variation. This will happen, for example, where the variation is an increase in the duration of the lease or in the extent of the demise. For SDLT purposes this will also be treated as if it is the grant of a new lease and (as for any other lease) SDLT is payable in respect of the deemed new lease subject to the availability of "overlap" relief. For this reason (as well as other property law reasons), tenants may want to mitigate the SDLT implications by taking a reversionary lease for the additional term or a supplementary lease of the additional demise, particularly if the original lease was subject to stamp duty.
- Where the tenant gives money or money's worth for a variation (other than an increase in the rent or a variation to the term), the variation is treated as an acquisition of a chargeable interest by the tenant and SDLT must be paid on the consideration. Consideration given by the tenant for a reduction in rent is also chargeable to SDLT, although HMRC state that they ignore a party relinquishing a right under a lease (such as a tenant's break option) for these purposes.
The relevant notification and charging thresholds, and the rules for linked transactions, should be taken into account in each case.
Watch out for Part Two of Taxing Variations in tomorrow's blog.
The right for trans people to use the toilets of their choice is a politically and socially charged issue which currently features prominently in the media both in the UK and overseas.15 June 2016
The right for trans people to use the toilets of their choice is a politically and socially charged issue which currently features prominently in the media both in the UK and overseas. The...15 June 2016