Stamp Duty Land Tax: Lease Premium Calculation Guide Archived

SDLT on Lease Premiums and the Relevant Rental Figure

The archived HMRC guidance makes a narrow but important point: when calculating SDLT on the premium paid for the grant of a lease, the “relevant rental figure” should not be treated differently just because the property is residential or non-residential. This does not mean all SDLT rules for leases are the same, only that this specific step in the calculation is applied on the same basis.

  • The point applies only to SDLT on the grant of a lease where there may be both a premium and rent.
  • The “relevant rental figure” is part of the technical calculation used for the premium element.
  • HMRC’s archived material says there is no reason to distinguish between residential and non-residential lease premium payments for this issue.
  • You should still separate the premium from the rent and check whether this part of the calculation is engaged.
  • Other SDLT rules may still differ between residential and non-residential leases, including rates and wider statutory provisions.

Scroll down for the full analysis.

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SDLT on a lease premium: what “relevant rental figure” means

This page is about a technical part of the Stamp Duty Land Tax rules for leases. It concerns the “relevant rental figure” used when calculating SDLT on a lease premium. The source material is very brief and archived, but its practical message is that there is no reason to distinguish between residential and non-residential lease premium payments for this point.

What this rule is about

When SDLT applies to the grant of a lease, the tax calculation can involve more than one element. A lease may involve:

  • a premium or other charge paid for the grant of the lease, and
  • rent payable over the term.

The phrase “relevant rental figure” belongs to the machinery of calculating SDLT in lease cases. In broad terms, it is part of the framework used to work out how the premium element is treated.

The archived source specifically indicates that, for lease premium payments, there is no reason to treat residential leases differently from non-residential leases on this point.

What the official source says

The source is an archived HMRC manual page headed “Calculation of stamp duty land tax: Lease premium: Relevant rental figure”. Its substantive content says that there is no reason to differentiate between residential and non-residential lease premium payments.

That is a narrow point. It does not say that all SDLT rules for residential and non-residential leases are the same. It says only that, for this particular aspect of the lease premium calculation, the distinction does not matter.

What this means in practice

If you are analysing SDLT on the grant of a lease and you reach the stage where the “relevant rental figure” matters, you should not assume that the method changes simply because the property is residential rather than non-residential.

In practical terms, the archived guidance suggests that this part of the lease premium calculation operates on the same basis across both categories.

That matters because lease transactions often involve several moving parts. It is easy to assume that the residential/non-residential split affects every step of the calculation. This source indicates that, at least for the “relevant rental figure” in relation to lease premium payments, that assumption would be wrong.

However, that does not remove the need to check the wider SDLT rules. Residential and non-residential treatment can still matter elsewhere in the lease charge calculation, including rate structures and other statutory provisions.

How to analyse it

A sensible way to approach this point is:

  • First, confirm that the transaction is the grant of a lease for SDLT purposes.
  • Next, identify the consideration being given. Separate any premium from the rent.
  • Then ask whether the calculation requires you to consider the “relevant rental figure” for the premium element.
  • If it does, do not introduce a separate method merely because the lease is residential or non-residential, unless some other legislative provision clearly requires that.
  • Finally, check the rest of the SDLT computation independently. The absence of a distinction at this stage does not mean there are no distinctions elsewhere.

The key analytical point is to isolate the precise issue. The source is about one component of the calculation only. It is not a general statement that residential and non-residential leases are taxed identically.

Example

Illustration: a tenant takes a new lease and pays both an upfront premium and annual rent. When working through the SDLT treatment of the premium, the calculation reaches the point where the “relevant rental figure” must be identified. According to the archived HMRC material, there is no reason at that stage to use one approach for a residential lease and another for a shop or office lease merely because of the property type.

That does not mean the final SDLT result will necessarily be the same in both cases. It means only that this particular step in the premium calculation is not split by reference to residential versus non-residential use.

Why this can be difficult in practice

The main difficulty is that the source material is extremely sparse and archived. It states a conclusion, but does not explain the underlying reasoning in detail on the page provided.

That creates two practical issues:

  • Readers may overread the point and assume it applies to all lease SDLT rules.
  • Readers may underread it and wrongly think every lease calculation step must change depending on whether the property is residential.

The safer reading of the source is narrow. It addresses lease premium payments and says there is no reason to distinguish between residential and non-residential treatment for the “relevant rental figure”. Beyond that, you would need to look at the wider legislative framework and any current guidance to see how the full lease calculation operates.

Key takeaways

  • This is a narrow SDLT calculation point about lease premiums and the “relevant rental figure”.
  • The archived HMRC material says there is no reason to distinguish between residential and non-residential lease premium payments for this issue.
  • That does not mean all other SDLT rules for leases are the same across residential and non-residential property.

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: Lease Premium Calculation Guide Archived

View all HMRC SDLT Guidance Pages Here

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