Example of Five-Year Rent Reviews for SDLT Calculation Moved

SDLT and five-year rent reviews on leases

Where a lease includes a five-year rent review, SDLT is not always worked out using fixed rent for the whole term. If future rent is variable or uncertain when the lease starts, the SDLT position must be calculated using the rules for uncertain or variable rent, and it may need to be checked again when the rent later becomes known.

• SDLT on a lease can be based on both any premium and the rent payable over the lease term.
• A five-year rent review is part of the wider SDLT rules on variable or uncertain rent, especially where later rent is not known at the effective date.
• The key issue is whether future rent can be worked out from the lease at the start, or whether it depends on future facts, valuation, turnover, or market conditions.
• You should review the lease wording carefully, including any formula, indexation, open market review, minimum or maximum rent, and turnover provisions.
• The archived HMRC page does not give the full example and instead refers readers to SDLTM13165 for current guidance.
• Because HMRC manuals are guidance rather than law, the final SDLT treatment depends on the legislation and the actual lease terms.

Scroll down for the full analysis.

SDLT and five-year rent reviews: treatment of variable or uncertain rent

This page concerns how Stamp Duty Land Tax applies where rent under a lease is variable or uncertain and is reviewed every five years. The source material itself is very limited and mainly indicates that the example previously on this page has been moved elsewhere. Even so, the underlying point is important: where lease rent is not fixed from the outset, SDLT requires a method for working out the tax position despite that uncertainty.

What this rule is about

SDLT on a lease can depend not only on any premium paid, but also on the rent payable over the term. Problems arise where the rent is not known with certainty at the start. That may happen because the lease includes review provisions, turnover rent, index-linked rent, stepped rent, or another mechanism that changes the amount over time.

A five-year rent review is one common example. The legal issue is how SDLT should be calculated when later rent figures are not yet known when the return must be filed.

What the official source says

The supplied source does not set out the substantive rule. It states only that the page has been archived and that the example has been moved to SDLTM13165. So the source confirms that this topic sits within HMRC’s SDLT guidance on calculating tax where rent is variable or uncertain, specifically in the context of five-year rent reviews.

That tells the reader two useful things. First, five-year reviews are treated as part of the wider rules for variable or uncertain rent. Second, the practical guidance is example-based, which usually means the tax treatment depends on applying a general rule to the facts of the lease.

What this means in practice

If a lease contains five-year rent reviews, the SDLT calculation may not be as simple as adding up the rent stated in the lease. The key practical question is whether the future rent is fixed and ascertainable at the effective date of the transaction, or whether it remains uncertain.

That matters because SDLT on rent is calculated by reference to the rent over the lease term using the statutory method. If later rent cannot yet be known, the taxpayer still has to file an SDLT return on time and calculate tax on the basis required by the legislation and HMRC practice for uncertain or variable rent.

In practical terms, conveyancers and taxpayers should not assume that a standard five-year review clause can be ignored until the review actually happens. The existence and structure of the review mechanism may affect the initial SDLT calculation and may also raise the question whether any later return or adjustment is needed when the rent becomes known.

How to analyse it

A sensible way to approach a lease with five-year rent reviews is to ask the following questions:

• What exactly does the lease say about rent during each period?
• Is the reviewed rent fixed by a formula that can already be applied, or does it depend on future facts or valuation judgment?
• Is the rent merely variable, or genuinely uncertain at the effective date?
• Does the lease provide a minimum rent, maximum rent, indexation mechanism, open market review, or turnover element?
• At the filing date, what parts of the rent are known and what parts are not?
• Does the later determination of rent trigger any need to revisit the SDLT position under the relevant lease rules?

The source page does not itself answer those questions, but they are the right questions because the page sits within HMRC’s calculation guidance for variable or uncertain rent.

Example

Illustration: a tenant takes a 15-year lease. The lease states an initial annual rent for the first five years, then provides for open market rent reviews at years 5 and 10. At the start of the lease, the reviewed rents are not yet known because they depend on future market conditions and valuation evidence.

The SDLT analysis would need to consider how the uncertain rent rules apply to those later periods, rather than treating the whole term as if all rents were already fixed from the outset.

Why this can be difficult in practice

The difficulty is that rent review clauses vary widely. Two leases may both refer to a five-year review, but the SDLT treatment may differ depending on the drafting. A formula linked to a published index may be easier to analyse than an open market review requiring future valuation. A clause with collars, caps, turnover elements, or side arrangements may complicate matters further.

Another practical difficulty is that HMRC manual pages are guidance, not the legislation itself. A worked example can help show HMRC’s approach, but the legal result still depends on the statutory rules and the actual terms of the lease. Where the source page has been moved, it is especially important to check the current manual page and, where necessary, the legislation behind it.

Key takeaways

• A five-year rent review falls within the wider SDLT issues around variable or uncertain rent on leases.
• The archived source page does not contain the example itself; it points readers to SDLTM13165 for the current example.
• The SDLT treatment depends on the lease terms and on whether future rent is fixed, variable, or genuinely uncertain at the effective date.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Example of Five-Year Rent Reviews for SDLT Calculation Moved

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