A monthly periodic tenancy is granted orally on 1 March 2005
at a rent of £600 per month. The lease is initially treated as
a lease for 1 year with a net present value (NPV) of £6,956.
The effective date of the transaction is the date of grant, that is
1 March 2005. No notification is required as:
The tenant remains in occupation after 28 February 2006 and the
periodic tenancy continues in this fashion past 1 March 2011, with
the rent still being £600 per month. On 1 March 2011, the
lease is treated as being for a term of 7 years from 1 March 2005.
The NPV of the lease is now £44,024 and is still below the
threshold.
Although the notional lease is now for a term of 7 years and
is granted for chargeable consideration, it need not be notified as
it is the term of the lease
when granted which determines whether a
lease needs to be notified, even once its notional term has been
extended (refer to
SDLTM12010 and
SDLTM12050).
