RENT REVIEWS AND STAMP DUTY LAND TAX – YOU CAN’T AFFORD TO IGNORE THIS!!

Dealing with rent reviews can be a stressful time but are common to nearly all leases! If you are a Tenant and have recently experienced a rent increase under your rent review, you will be aware of the stresses of the process. Unfortunately though, the stresses do not stop once the rent has been agreed.

Did you know you could also be liable for Stamp Duty Land Tax if your rent has increased?If your lease started after 1st December 2003 and the HMRC considers the rent increase is abnormal you may need to file a return in the following circumstances: –

  1. If there is a rent review during the first five years of your lease and the annual rent has increased;
  2. if there is a large increase (i.e. over 5%) in the rent after the first five years of the term;
  3. if the rent is varied by a deed;
  4. If you stay in the property at the end of the Term without formally renewing your Lease.

It is your responsibility to ensure that you comply with the Stamp Duty Land Tax obligations and failure to do so could result in a financial penalty. What can you do?Don’t panic! We can help. If you are concerned that your rent increase could attract Stamp Duty Land Tax liability, or even if you would like to discuss your recent review or any issues you may have in relation to your Lease, call us! We can deal with submitting the Stamp Duty Return Form and help you with any other queries you may have.

Business law briefing No: 5