SDLT and stamp duty when a lease continues
Lease continuation and SDLT
A fixed-term lease that carries on can be treated as extended for SDLT purposes.
- Each full continuation period may matter
- A new lease can change the result
- Further filing duties may arise
Scroll down for the full analysis.
Read the original guidance here:
SDLT and stamp duty when a lease continues
Although its fixed period has ended, a lease may continue where the tenant remains and the arrangement carries on until someone ends it or law determines otherwise. That can prompt another SDLT review. A further return, and sometimes more tax, can follow.
What this rule is about
This issue is often called holding over, and it applies where a lease with a fixed period carries on until someone ends it, or continues by law. It can matter.
That detail can affect SDLT even if nobody signs a new agreement.
What the official source says
The HMRC page is only a contents page. It directs readers to HMRC’s fuller page on continuation of a lease. The law treats a continuing lease as a series of possible one-year extensions.
- First, it counts as ending on its original fixed end date.
- If it continues, it then counts as one year longer.
- Each further year can extend the treated term again.
- If it ends during that year, the treated extension ends then.
What this means in practice
When a tenant remains after the stated end date, the continuing arrangement can require a fresh SDLT check under the rules that apply to that lease. That check may be necessary. HMRC’s manual is guidance, not the law. Schedule 17A contains the rule that matters.
- A return is due within 14 days if the continuation makes the lease notifiable.
- A further return is due within 30 days if tax first becomes due, or more tax becomes due.
- The return must include a calculation of the tax due.
- Any tax due must be paid by that filing date.
How to analyse it
Start with the paperwork and dates. The key question is not simply whether the tenant stayed. Identify the lease and what followed.
- Check the fixed term and its stated end date.
- Ask whether the lease continued after that date.
- Work through each completed continuation year.
- Check whether a new lease replaced the old one.
Example
Maya has a five-year lease that continues until ended after year five. She stays for a full further year. For SDLT purposes, the lease may then count as a six-year lease. If that change creates extra tax, the relevant further-return rule may apply.
Why this can be difficult in practice
Lease labels can hide the real position. A later agreement may prevent the old lease from being treated as continuing when statutory conditions are met, including those concerning its premises and timing. The conditions matter.
- A later lease must cover the same or substantially the same premises.
- Its term must begin during the relevant continuation year.
- Dates, rent records and both lease documents may be important.
Key takeaways
- Staying after a lease ends can affect SDLT.
- The law tests continuation in one-year stages.
- Check promptly whether a further return is needed.
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 Schedule 17A para 3 — treating a continuing fixed-term lease as yearly extensions; returns and tax where a lease continues; exceptions and early ending during a continuation year
- FA 2003 Schedule 17A para 3A — new leases granted while the tenant holds over
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.
Where this is not settled
- Whether premises are substantially the same, and whether a later lease meets the statutory conditions, can depend on the lease documents and timing.
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 original lease and its fixed end date
- Evidence of the date the tenant actually left or stayed
- Any later lease, including its start date and premises
- The original SDLT return and tax calculation
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 SDLT and stamp duty when a lease continues [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 Schedule 17A para 3 - treating a continuing fixed-term lease as yearly extensions https://www.legislation.gov.uk/ukpga/2003/14/schedule/17A/paragraph/3/2025-11-17 - FA 2003 Schedule 17A para 3 - returns and tax where a lease continues https://www.legislation.gov.uk/ukpga/2003/14/schedule/17A/paragraph/3/2025-11-17 - FA 2003 Schedule 17A para 3 - exceptions and early ending during a continuation year https://www.legislation.gov.uk/ukpga/2003/14/schedule/17A/paragraph/3/2025-11-17 - FA 2003 Schedule 17A para 3A - new leases granted while the tenant holds over https://www.legislation.gov.uk/ukpga/2003/14/schedule/17A/paragraph/3A/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/sdltm12045 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. POINTS ALREADY KNOWN TO BE UNCERTAIN ON THIS TOPIC - Whether premises are substantially the same, and whether a later lease meets the statutory conditions, can depend on the lease documents and timing. 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: SDLT and stamp duty when a lease continues
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