The total value paid by the SDLT/LBTT/LTT tenant (sometimes referred to as “consideration” is usually the total rent for the duration of the lease. In fact, the most painful part of the process can be the fines HMRC collects for non-payment, so check your lease and make sure you have all the vouchers on hand and take into account the extra tax. If it`s too difficult to keep an overview of all your payments and income, outsource your accounting to a certified accountant. This presupposes, however, that, when the lease is renewed, the conditions of renewal are linked to the old lease. If you were negotiating a separate lease agreement on different terms – although your landlord is the same – the new and old leases would not be linked. They would therefore count from scratch at the beginning of the new lease. Angela Davey, president of ARLA Propertymark, however, said: “Whether this clause is in a lease agreement depends on the market in which the agent works, as quality rents are generally only applicable in certain cities across Britain.” An SDLT/LBTT/LTT return must be sent to HMRC/Revenue Scotland/Welsh Revenue Authority (on paper or online) and the fee must be paid within 30 days of the start of the lease or the date of triggering of an SDLT/LBTT/LTT liability in the case of linked leases. Most people only associate stamp duty with buying and selling homes, but if the cumulative rent paid by a tenant over the total term of their rental exceeds a threshold, they must also pay a 1% stamp duty on any amount above that threshold. SDLT may be payable when a lease is awarded and is calculated by reference to the “Net Present Value”, i.e.
the total rent paid. The 29-year-old and his wife live in north London and pay £1,775 a month in rent. He says: “I was shocked when I found out that as a tenant I had to pay stamp taxes at some point in my rental agreement, because although the threshold is £125,000 in rent, it would only take five to six years to rent the same property to reach that figure. SDLT is calculated for the total term for which a tenant has a lease agreement of up to seven years. When a tenant uses a one-year lease and exercises an option to extend for an additional year, the tax office considers it to be a related transaction and the calculation of the capital value is based on the gross rent paid for both years. The SDLT is recalculated at the beginning of the second year taking into account the rent and SDLT paid for the first year. If the tenant accepts a one-year lease agreement and continues to live in the property at the end of this monthly period, the tax office considers this to also be a related transaction and calculates the SDLT assuming that the tenant will spend another full year in the property. . . .