Lease Extension


F

Freda

I have recently been told by a solicitor that there maybe "stamp duty"
issues associated with the extension of a residential lease. Something
related to a recent rule change.

I have a 99 year lease on my flat, with 69 years to run and I can extend
it to 999 years for a £1 fee to the freeholder plus "costs" - which in
the past has just meant that the leaseholder pays the legal fees.

Was this solicitor right in saying that stamp duty now needs also to be
paid? He didn't seem sure.
 
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F

Freda

Daytona said
There's a lease calculator on the Inland Revenue site
<URL:http://www.inlandrevenue.gov.uk/so/>

hth
OK - thanks.

I assume that "rent" means ground rent? And premium? Is that the amount
paid for the lease extension (£1)?

I put in the figures I thought were right - 999 year lease, £20 a year
ground rent and a premium of £1 and the premium stamp duty came out at
£0.01, while the lease stamp duty was £0.00.

Anyway, I take it from this that stamp duty is indeed payable on
residential lease extensions - although it would seem that in my case it
will be negligible.
 
D

DKCC

Stamp Duty no longer exists in respect of land transactions and was replaced
by Stamp Duty Land Tax on 1 December 2003.

The Stamp Duty Land Tax regime is "applicable" to every land transaction in
respect of land in the UK. Broadly speaking, however, in order for there to
be chargeable consideration for SDLT purposes, the Net Present Value (which
is the total rent taking into a certain discount) must exceed £150K. SDLT
is then charged at 1% in respect of rent for the amount exceeding £150K. In
your case, you are nowhere near the threshold, hence no SDLT is payable.

DKCC
 
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F

Freda

DKCC said
Stamp Duty no longer exists in respect of land transactions and was replaced
by Stamp Duty Land Tax on 1 December 2003.

The Stamp Duty Land Tax regime is "applicable" to every land transaction in
respect of land in the UK. Broadly speaking, however, in order for there to
be chargeable consideration for SDLT purposes, the Net Present Value (which
is the total rent taking into a certain discount) must exceed £150K. SDLT
is then charged at 1% in respect of rent for the amount exceeding £150K. In
your case, you are nowhere near the threshold, hence no SDLT is payable.
Thank you for the full reply - appreciated.
 

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