Stamp duty when you surrender a lease and receive a new one
In short
Giving up an old lease for a new lease with the same parties does not, by itself, create an SDLT payment in either direction.
- The exchange rule is switched off.
- Other payments still matter.
- The lease documents must support the arrangement.
Scroll down for the full analysis.
Read the original guidance here:
Stamp duty when you surrender a lease and receive a new one
If you give up an old lease and receive a new one from the same party, stamp duty land tax does not treat each lease as payment for the other. That can stop a lease replacement being taxed as an exchange simply because both steps happen together.
What this rule is about
A lease can end early when the tenant gives it up. After that, the landlord may grant the tenant a new lease. This often happens when the parties want new terms, a new length, or a new property arrangement.
There are two legal steps: ending the old lease and granting the new one. Without this special rule, each step may appear to be the price for the other.
What the official source says
HMRC’s manual reflects the rule in the legislation for a new lease granted in return for surrendering an old lease between the same parties.
- Giving up the old lease does not count as payment for the new lease.
- Receiving the new lease does not count as payment for giving up the old lease.
- In this situation, the usual SDLT rule for exchanges does not apply.
What this means in practice
This does not automatically mean there is no SDLT. Instead, the swap of leases itself is left out when working out the amount counted for SDLT.
- Check any premium paid for the new lease.
- Check the rent due under the new lease.
- Check for any separate payment for ending the old lease.
How to analyse it
Start with the documents, not the label used by the parties. Ask whether this is truly a surrender and new grant involving the same people or organisations.
- Identify the old lease that ends.
- Identify the new lease that is granted.
- Confirm that the parties are the same.
- List every cash payment, rent payment, and other benefit.
Example
Amir gives up his existing shop lease to his landlord. At the same time, the landlord grants Amir a new lease. In this arrangement, the old lease is not treated as payment for the new one, and the new lease is not treated as payment for ending the old one. If Amir also pays a £20,000 premium, that separate payment still needs to be considered.
Why this can be difficult in practice
This is the part people can miss: the rule ignores the exchange of leases, not everything else in the deal. Side payments and changed parties can alter the answer.
- A payment described as part of the surrender may be separate from the lease swap.
- A different tenant or landlord may mean the same-parties condition is not met.
- Several agreements signed together may still contain separate payments.
Key takeaways
- A lease swap between the same parties has a special SDLT rule.
- Neither the old nor the new lease counts as payment for the other.
- Check rent, premiums and other payments separately.
Technical analysis
For advisers, and for anyone who wants to check the law behind this page. You do not need this section to understand the guidance above.
Legislation
- FA 2003 section 50 — introduces rules for amounts counted for SDLT
- FA 2003 Schedule 4 para 5 — sets SDLT rules for exchanges of land interests
- FA 2003 Schedule 17A para 16 — disregards lease surrender and regrant between same parties
Official guidance
The pages below are HMRC’s guidance. Guidance is not law. It sets out how HMRC reads the legislation, and it is not binding on you, on a tribunal or on a court. Where guidance and the legislation differ, the legislation wins. HMRC can also change or withdraw guidance, and it may not cover your facts.
Evidence you would need
This kind of case is decided on the facts of the individual property. These are the records that usually settle it, and the ones an adviser would ask you for.
- the old lease and surrender document
- the new lease
- details showing who is party to both leases
- a list of any premium, rent, payment or other benefit provided
Explore this with an AI
Readers often want to test their own situation. Copy the prompt below into ChatGPT, Claude or Gemini. It hands the model the actual legislation for this page rather than letting it answer from memory, and tells it to be explicit about what is uncertain. What comes back is information, not advice – check it against the links above.
I am researching UK Stamp Duty Land Tax (SDLT), which applies in England and Northern Ireland. MY QUESTION Stamp duty when you surrender a lease and receive a new one [Replace this with your own situation: what you are buying, the price, the dates, who the buyer is, and what you plan to do with the property.] THE LAW THIS TURNS ON - FA 2003 section 50 - introduces rules for amounts counted for SDLT https://www.legislation.gov.uk/ukpga/2003/14/section/50/2025-11-17 - FA 2003 Schedule 4 para 5 - sets SDLT rules for exchanges of land interests https://www.legislation.gov.uk/ukpga/2003/14/schedule/4/paragraph/5/2025-11-17 - FA 2003 Schedule 17A para 16 - disregards lease surrender and regrant between same parties https://www.legislation.gov.uk/ukpga/2003/14/schedule/17A/paragraph/16/2025-11-17 Guidance page from HMRC on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm04100 HOW I WANT YOU TO ANSWER 1. Work from the legislation above. Read it before answering. Guidance from HMRC is its view of the law, not the law, and does not bind a tribunal or a court. 2. Tell me what the rule actually requires, in plain English. 3. Tell me which facts decide the answer, and which facts would change it. 4. Tell me what evidence I would need to support the position. 5. Be explicit about anything unsettled or fact-sensitive. Do not guess. 6. Your training data has a cutoff and SDLT rates and reliefs change at fiscal events. Say so if you are not sure the law is current. Do not give me a conclusion you cannot support from the provisions above.
Legislation links show Finance Act 2003 as it stood on 2025-11-17. The law may have changed since, and the rules that apply are those in force on the date of your transaction. The official guidance this page is based on is here.
This page was last updated on 31 August 2026
Useful article? You may find it helpful to read the original guidance here: Stamp duty when you surrender a lease and receive a new one
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