Future Lease Grant Example: SDLT Changes in Scotland from April 2015

SDLT and leases granted now but starting later

This archived HMRC material is mainly a warning about tax regime changes rather than full guidance on how to tax a lease that is granted now but begins in the future. Its key point is that SDLT stopped applying to Scottish land transactions from April 2015, so Scottish leases from that date onwards must be considered under LBTT instead.

• A lease can be signed on one date but written so that the term starts later, which creates timing questions for property transaction taxes.
• The HMRC page is archived and is only of historical relevance for Scottish transactions from before April 2015.
• For land in Scotland from April 2015 onwards, SDLT does not apply and Land and Buildings Transaction Tax is the relevant regime.
• The first practical checks are where the property is, the transaction date, and the effective date.
• You should distinguish between the date the lease is granted and the date the lease term begins, as they may not be the same.
• The archived notice does not explain the full tax treatment, so current legislation and guidance for the correct tax regime must be used.

Scroll down for the full analysis.

SDLT and leases that start in the future: what this archived example is about

This page concerns a narrow SDLT point: a lease may be granted now, but drafted so that the term does not begin until a later date. The archived HMRC material signals that this was an SDLT issue for Scotland before April 2015, but that Scottish land transactions are now dealt with under Land and Buildings Transaction Tax instead. The source itself is very brief, so the main practical point is understanding the legal setting and the change in tax regime.

What this rule is about

A lease can be executed on one date but made to commence in the future. That raises timing questions for transaction taxes on land, because the legal grant happens now, while the tenant’s term begins later.

The archived source sits within HMRC’s SDLT material on “miscellaneous provisions” and specifically refers to an example involving a grant of a lease to commence in the future. The page also carries an important territorial warning: from April 2015, SDLT no longer applies to land transactions in Scotland.

What the official source says

The official page states that it is archived and that, from April 2015, SDLT no longer applies to land transactions in Scotland. Instead, such transactions are subject to Land and Buildings Transaction Tax.

That means the page is not current guidance for Scottish land. Its value is historical only, unless you are dealing with a transaction from the period when SDLT still applied in Scotland.

What this means in practice

The first question is where the land is located.

• If the land is in Scotland and the effective date is from April 2015 onwards, SDLT is not the relevant tax. You need to consider LBTT instead.
• If you are looking at an older Scottish transaction from before the switch, archived SDLT material may still matter.
• If the land is elsewhere in the UK, the fact that this page is archived because of the Scottish tax change does not by itself answer the SDLT treatment. You would need the current SDLT rules and any fuller guidance on future-commencement leases.

The practical significance of the source is therefore mainly jurisdictional and temporal. It tells you not to rely on this SDLT page for post-April 2015 Scottish transactions.

How to analyse it

Use this checklist:

• Identify where the property is situated.
• Identify the date of the transaction and, if relevant, its effective date.
• Check whether you are dealing with a historical SDLT position or a current LBTT position.
• If the lease was granted before it began, separate the date of grant from the contractual commencement date of the term.
• Do not assume that an archived HMRC SDLT example gives the current answer for Scottish property.

If you need the substantive tax treatment of a lease granted now but beginning later, the key documents will be the legislation and current guidance for the correct tax regime, not merely this archived notice.

Example

Illustration: a lease of Scottish commercial property is signed in May 2015, but the term is stated to begin in September 2015. The archived HMRC page indicates that SDLT is no longer the relevant tax for that Scottish land transaction. The starting point would be LBTT, not SDLT, even though the issue involves a lease commencing in the future.

Why this can be difficult in practice

The difficulty is that the source heading suggests a technical SDLT example about future-commencement leases, but the text provided is only an archival notice. It does not set out the substantive rule, the timing treatment, or the tax calculation.

That creates two risks:

• confusing an archived page title with current law; and
• assuming that a lease starting later is taxed only when occupation begins, when the real answer depends on the applicable legislation and the transaction’s facts.

Where timing matters, it is important to distinguish between the grant of the lease, the start of the term, and the tax regime in force for the land in question.

Key takeaways

• This archived HMRC page mainly tells you that SDLT stopped applying to Scottish land transactions from April 2015.
• For Scottish leases from that point onwards, the relevant tax is LBTT, not SDLT.
• A lease granted now but starting later can raise timing issues, but this source extract does not itself give the full substantive rule.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Future Lease Grant Example: SDLT Changes in Scotland from April 2015

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