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    • Alex88
    • By Alex88 3rd Dec 19, 3:06 PM
    • 4Posts
    • 0Thanks
    Stamp Duty for Residential Tenants
    • #1
    • 3rd Dec 19, 3:06 PM
    Stamp Duty for Residential Tenants 3rd Dec 19 at 3:06 PM
    Hi, i have called the HMRC 3 different times with 3 different answers and the HMRC/ Gov website is not only incredibly confusing but in some cases conflicting.

    We are 5 mates who are about to sign an assured shorthold tenancy agreement directly with a landlord to rent her property for 24 months.

    the total rent over this term will be around 135,000.

    Do we need to pay stamp duty?

    1 HMRC guy said yes, the threshold is 125k.
    if this is true if we reduce the term to 22 months, this gets us under the threshold, would we still need to do anything/ fill out any forms?

    Another HMRC guy told us that we are not changing the ownership of the property or the land, its a simple tenancy agreement and therefore this does not affect us. it's more for cases such as someone buying a flat in a block and renting the lease from the block of flats landlord.

    The third HMRC guy started talking about 150k threshold which has no relation to residential and when i raised this he started flapping and said he can't offer tax advice.

    can anyone tell us what the right answer is here?

    Also, on the gov website they talk about premium as well as rent. what is 'premium'?

    we pay a fix rent amount, nothing else.

    thanks for your help on this matter!

    Last edited by Alex88; 03-12-2019 at 3:12 PM.
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    • Pennywise
    • By Pennywise 3rd Dec 19, 4:14 PM
    • 12,362 Posts
    • 24,661 Thanks
    • #2
    • 3rd Dec 19, 4:14 PM
    • #2
    • 3rd Dec 19, 4:14 PM
    I'm no expert on Stamp Duty, but the first HMRC guy sounds right to me. I had similar when taking out a lease for a commercial office - I wanted a 10 year lease, but the solicitor flagged up that stamp duty would be due, and then worked out there'd be no stamp duty on a 7 year lease, so that's what we went for instead.
    • SDLT Geek
    • By SDLT Geek 3rd Dec 19, 4:22 PM
    • 730 Posts
    • 495 Thanks
    SDLT Geek
    • #3
    • 3rd Dec 19, 4:22 PM
    • #3
    • 3rd Dec 19, 4:22 PM
    SDLT is payable and a return is needed if the “net present value” of the rent over the agreed term is over 125,000. The NPV is worked out by putting the rent into the HMRC calculator. It applies a small discount to each year’s rent to work out a present day value.

    Yes, a slight reduction to the length of the tenancy might well mean that no SDLT is payable and no return is needed.
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