Stamp Duty Land Tax: Abnormal Rent Increases Calculation Example

SDLT and abnormal rent increases on leases

This archived HMRC material is about how Stamp Duty Land Tax can apply to rent under a lease where the rent rises in an unusual way. The actual worked example is not included, so the detailed calculation cannot be taken from this source alone, but it shows that abnormal rent increases can need special treatment and that Scottish transactions from April 2015 fall under LBTT instead of SDLT.

• The topic concerns SDLT on lease rent, not just any premium paid for the lease.
• Unusual rent patterns, such as sharp or deferred increases, may affect how rent is assessed for SDLT.
• The source is an archived HMRC manual page, so it is guidance rather than the law itself.
• The missing worked example means the exact calculation method cannot safely be explained from this material alone.
• In practice, you should check the tax regime, the lease terms, and the legislation before relying on HMRC examples.
• For land in Scotland from April 2015 onwards, SDLT no longer applies and LBTT must be considered instead.

Scroll down for the full analysis.

SDLT and abnormal rent increases: worked example

This page is about a very specific SDLT issue: how to deal with rent under a lease where the rent increases in an abnormal way. The source material is an archived HMRC manual page headed as an example page, but the text provided contains no worked example itself. Even so, the heading tells you the topic: the SDLT calculation for rent where there are abnormal rent increases. This matters because SDLT on leases is not based only on any premium paid. It can also be charged on the rent, and unusual rent patterns can affect how that rent is treated for tax purposes.

What this rule is about

For SDLT on leases, the tax treatment of rent can become more complicated where the rent does not rise in a normal or expected way. An “abnormal rent increase” is relevant because lease rent is normally assessed by reference to the rent payable over the term, and unusual increases may require special treatment rather than a simple year-by-year assumption.

The source page sits within HMRC’s SDLT manual under the calculation rules for rent. It is therefore concerned with how the tax is calculated, not with whether SDLT applies in principle.

The source also notes that the page is archived and that, from April 2015, SDLT no longer applies to land transactions in Scotland. Transactions in Scotland from that point fall instead under Land and Buildings Transaction Tax.

What the official source says

The supplied source gives only the page title and archive notice. From that, the reliable points are limited:

• the page was intended to provide an example of the SDLT calculation for rent where there are abnormal rent increases;
• it forms part of HMRC’s SDLT manual rather than the legislation itself;
• it is archived material; and
• for Scottish land transactions from April 2015, SDLT is replaced by LBTT.

Because the actual worked example text is not included, the source does not provide enough detail here to restate the calculation method itself.

What this means in practice

If you are dealing with a lease for land in England or Northern Ireland, and the rent increases in an unusual way, you should not assume that SDLT can be worked out by using a simple, standard rent pattern. The page heading indicates that HMRC treated this as a distinct calculation issue.

In practice, that means you would usually need to check:

• whether the transaction is within SDLT at all, rather than LBTT or LTT;
• whether the lease includes rent increases that may be treated as abnormal;
• what the legislation says about rent for lease transactions; and
• whether HMRC manual guidance gives an example that helps apply the statutory rules.

The archive notice is also important. If the property is in Scotland and the effective date is from April 2015 onwards, SDLT guidance of this kind is no longer the governing transaction tax regime. You would need to consider LBTT instead.

How to analyse it

A sensible way to approach this issue is:

1. Identify the tax regime. Is the land in England, Northern Ireland, Scotland, or Wales? The source itself flags that Scotland moved out of SDLT from April 2015.
2. Confirm the transaction type. This topic concerns leases and the rent element of the charge.
3. Review the rent pattern in the lease. Look for stepped rents, deferred increases, sharp uplifts, turnover-linked features, or other unusual changes.
4. Check the legislation first. HMRC manuals help explain HMRC’s view, but the legal effect comes from the statute.
5. Use examples with care. A manual example can illustrate HMRC’s approach, but it does not replace the actual statutory calculation.

If the issue is whether a rent increase is “abnormal”, the exact drafting of the lease and the timing and scale of the increase are likely to matter.

Example

Illustration: a tenant takes a long lease at a low initial rent, but the lease provides for a substantial increase after a short period in a way that does not reflect an ordinary review pattern. That kind of arrangement may raise the question whether the increase should be treated as an abnormal rent increase for SDLT calculation purposes. The page heading suggests HMRC had a worked example for this sort of case, but the actual example text is not included in the material provided here, so no further detail can safely be given from this source alone.

Why this can be difficult in practice

This topic is difficult because the supplied source is incomplete. The heading identifies the legal issue, but not the calculation steps or the facts of the example. That creates two practical limits.

• First, you cannot safely reconstruct HMRC’s example from the heading alone.
• Second, you should not assume that every rent increase is “abnormal” in the technical SDLT sense.

There is also a wider interpretive point. HMRC manual pages are guidance, not the legislation. So even where a manual gives an example, the real legal question remains what the statutory rent rules require on the facts of the particular lease.

The archive status adds another layer. Older SDLT manual material may still matter for historic SDLT transactions, but it may not reflect later legislative changes, and it does not apply to post-devolution Scottish transactions.

Key takeaways

• This archived HMRC page concerns SDLT lease-rent calculations where rent increases are abnormal.
• The material provided does not include the actual worked example, so the detailed calculation cannot be stated from this source alone.
• The archive notice matters: from April 2015, Scottish land transactions are generally under LBTT, not SDLT.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Stamp Duty Land Tax: Abnormal Rent Increases Calculation Example

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