A 10 year non-residential lease within the Landlord and
Tenant Act 1954 comes to the end of its express term on 24 March
2015. The tenant remains in occupation whilst they negotiate a new
lease with the landlord. The annual rent was a fixed £60,000
per annum for the whole lease term and this remains payable after
24 March 2015 whilst negotiations continue.
The lease was originally granted on 25 March 2005 and
notified on 20 April 2005. The net present value (NPV) of the rent
was originally returned as £498,996 and stamp duty land tax
(SDLT) of £3,489 was paid.
On 25 March 2015 (the day after the original express term
ended), the lease is treated as being for one year longer than its
express term, that is a lease for 11 years granted on 25 March
2005. The NPV of the rent for this notional 11 year lease is
£540,093 and stamp duty land tax of £3,900 is due.
However, as £3,489 has already been paid, the net additional
stamp duty land tax due is £411. This should be returned on a
letter to
The
Compliance Team, Birmingham Stamp Office, giving details of the
original notification and payment and the new tax calculation. The
notification should be made by 23 April 2015, that is within 30
days of the notional extension of the lease.
Negotiations have not finished by 24 March 2016 and, as the
tenant is still in occupation, the lease is again treated as
extended by a further year from 25 March 2016, that is, it is now
treated as a lease for 12 years, granted on 25 March 2005. The NPV
of the rent for this 12 year lease is £579,800 and SDLT of
£4,298 is due. As £3,900 has already been paid (the
£3,489 on original notification on 20 April 2005 and the
additional £411 around 25 March 2015), the net additional SDLT
due is £398. This should be returned on a letter to Birmingham
Stamp Office, giving details of the previous notifications and
payments and the new tax calculation. The notification should be
made by 23 April 2016, that is within 30 days of the notional
further extension of the lease.
