For the purposes of stamp duty land tax (SDLT), a lease for a
definite or fixed term is one whose term can be ascertained
at the time of grant (either from the
wording of the lease itself or from some ancillary document such as
an agreement for lease or certificate of practical completion).
This includes a lease worded so that it ends on a specific date or
one where the term is a specific length of time from the date of
grant.
The term of a lease for a fixed term is taken to be:
This is following the decision in the case of
Bradshaw v Pawley [1980] 1 W.L.R. 10.
Any contingency which would cause a lease to terminate before
the end of the contractual term or any right of any party to
terminate or renew the lease is ignored for the purposes of
ascertaining the term for calculating the initial charge to SDLT.
Refer to FA03/SCH17A/PARA2.
For details of the tax implications of the subsequent
termination or renewal of a lease, refer to
SDLTM14080 and
SDLTM14090 respectively.
Case law has established that a term running
from a date excludes that date (refer
to for example
Whelton Sinclair v Hyland [1992] 2EGLR
158). Thus a lease with a term of 10 years from 25 March
2006 begins on 26 March 2006 and ends on 25 March 2016. A lease
with a term of 10 years
from and including 25 March 2006 begins
on 25 March 2006 and ends on 24 March 2016. For clarity, all
examples in this chapter will have commencement dates ‘from
and including’.
The normal rule in England, Wales and Northern Ireland is
that the term of a lease cannot commence earlier than the date it
is granted. However where a renewal lease (granted on or after 19
July 2006) is backdated, this rule is disapplied for SDLT purposes
under FA06/SCH25/PARA9A.
Refer to
SDLTM14020 to SDLTM14030 for
examples.
