stamp duty land tax payable by tenants

isleofdogs

We have been renters / tenants for almost 4 years. I have read that if our accumulated rent for the term of the lease is more than £125,000 then we have to pay SDLT! Our rent will reach this amount in year 5 (very expensive rent in London, and landlords keep increasing rent).
Q: if we move out to another rental property before the threshold is reached, then we do not have to pay SDLT. Is this correct?
Thanks for confirming. This means I will have to start looking for another property to rent before the threshold is reached.

libf

You only pay SDLT when a property changes hands. Whatever you've read is rubbish.

jbainbridge

Well someone thinks you do - http://prsupdate.co.uk/2014/04/stamp-duty-land-tax/

But then reading the HMRC pages I can't see any reference to rented property. Ground rent is referred to.

eddddy

I'm no expert on this but...

In his Budget Statement on 9 April 2003 the Chancellor of the Exchequer announced that a modernised system of stamp duty, renamed 'Stamp Duty Land Tax', would apply to most land transactions on or after 1 December 2003. This change will have important repercussions for private landlords and letting agents...

....The Finance Act sets a threshold of £150,000 for commercial leases, £125,000 for residential leases. If the NPV rental does not exceed the threshold, no Stamp Duty Land Tax is charged on the rental element.

If the lease or tenancy appears to be above the threshold, then it will be necessary to make a calculation of the SDLT payable, based on the total rental value of the lease adjusted for net present value. The SDLT is then levied at a rate of 1% on the amount of NPV-adjusted rent in excess of the threshold.


link: http://www.letlink.co.uk/index2.php?option=com_content&task=emailform&id=117&itemid=35314

So essentially, it seems that your rent will only increase by 1%.

(Which is probably less than the cost of moving!)

TrickyDicky101

I *think* that if the total rent payable under your lease in any individual fixed term is less than £125k then you do not have a SDLT liability.

However, I could well be wrong. Worth checking with HMRC helpline.

EDIT: Seeing the link onlyroz posts it looks like I have it completely wrong above.

onlyroz

There's quite a good explanation here:

http://www.marshallsproperty.co.uk/Content/Lettings/Guide-to-Tenants-.aspx

isleofdogs

Thanks, all, for your replies - much appreciated. The link above was helpful - it explains things well.