AST agreement - Q about Stamp Duty Land Tax

Molanole

Hi there

I'm hoping one of you very knowledgeable people will be able to help me. We're just about to move into a new flat and I'm just reading through the AST agreement. I've come across a couple of clauses which have me flummoxed

32.1 The parties certify that there is no other agreement for a long term lease or tenancy, which attracts Stamp Duty Land Tax payable at a higher rate on a purchase or premium, to which this Agreement gives effect.

32.2 The Tenant agrees that he will comply with his legal responsibility to pay the costs of the Stamp Duty Land Tax for the Agreement given to him and signed by the other party if the Rent exceeds the threshold after deduction of the discount.

Now, have I missed something? I thought that Stamp Duty referred to when a property was purchased, not when it's rented. Am I about to sign up to something which could hit me for loads of fees? I’ve been looking around on the web but can’t seem to find anything which relates to a tenancy rather than a purchase.

Please can anyone help?

Thank you

Mola

silvercar

If the rent over the whole term of the initial contract exceeds the stamp duty threshold, the AST would need to be registered with Land Registry and SDLT paid. For a years AST that would mean a monthly rent in excess of £10,000.

sooz

Hi,

Yes, you are responsible for SDLT.

However, it is very unlikely that you will have to pay anything, as it only applies if your rent for the entire term is over £125,000.

More info here

Molanole

silvercar and sooz

Thanks so much for your help. Looks like I'll have to rent for about 10 years consecutively to get to that point then!

I knew one of you would know the answer.

Thanks again

Mola

Rabiddog_2

I suppose that is their to stop someone disguising buying as renting over a year then handing over the flat..or maybe its the one way they DO catch the uber -rich??