SDLT: five-year rent reviews after an agreement for lease
The short answer
HMRC says that a lease granted after a substantially performed agreement for lease can restart the timing for its five-year rent-review example.
- Check every key date.
- Read the review clause carefully.
- Verify the historic law for older leases.
Scroll down for the full analysis.
Read the original guidance here:
SDLT: five-year rent reviews after an agreement for lease
A later lease can change the timing for a rent review when working out stamp duty land tax, or SDLT. In HMRC’s example, the later lease means a review due five years after the agreement is only three years after the re-grant. That changes the result.
What this rule is about
Some leases fix the rent at the outset while providing that a later review, once the specified conditions are met, will move it to market rent. That later amount may be unknown when the lease starts. SDLT has special rules for this sort of uncertain rent.
There is also a narrow rule for some first rent reviews which, under the relevant conditions, take effect five years after a stated date. The timing matters. A lease granted after an agreement can alter the starting point for that test.
What the official source says
HMRC gives an historic example. An agreement for lease was made on 1 January 2004 at rent of £100,000 a year. It provided for a market-rent review on 1 January 2009.
- The agreement was substantially performed on 1 January 2004.
- HMRC says this created a notional lease: a lease treated as granted for SDLT.
- An actual lease was granted on 1 January 2006.
- HMRC treats that event as ending the notional lease and granting another lease.
- The 2009 review then came only three years after that re-grant.
- HMRC says the special five-year review rule does not apply.
What this means in practice
You might assume that the five years invariably run from the agreement date, even when a substantially performed agreement is later followed by an actual lease. HMRC’s example says otherwise.
This is the part people miss. The date of the later lease can matter as much as the date of the agreement.
- Record the agreement date.
- Record when substantial performance happened.
- Record the date of the actual lease.
- Compare the review date with the relevant lease date.
How to analyse it
Begin with the documents and dates, rather than the label attached to the arrangement, because the factual sequence determines whether HMRC’s example supplies the relevant chain of events. That is the question.
- Is there an agreement for a lease?
- Did occupation, rent payments, or another event substantially perform it?
- When did the actual lease take effect?
- Does the lease allow the first rent change to an uncertain amount?
- When does that change take effect?
- Does the later lease reset the timing on the law that applied then?
Example
Here, the agreement began on 1 January 2004 and named £100,000 yearly rent. The market-rent review was due on 1 January 2009. But the actual lease arrived on 1 January 2006. On HMRC’s view, that gave a three-year gap to the review, not five. HMRC therefore says Schedule 17A paragraph 7A does not apply. The example gives no tax calculation.
Why this can be difficult in practice
The answer may depend on small details in the paperwork, because a different lease start date or a different review clause could lead to a different analysis. Details matter.
HMRC’s manual explains HMRC’s view. It does not replace the legislation, especially for an older transaction.
- Do not count only from the agreement date.
- Do not assume every market-rent review follows this example.
- Check the historic law where the transaction took place years ago.
Key takeaways
- A later lease may change the timing for a rent-review rule.
- HMRC’s example treats the 2006 lease as restarting the clock.
- Dates and lease wording decide the outcome.
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 7 — how SDLT treats variable or uncertain lease rent
- FA 2003 Schedule 17A para 7A — special timing rule for certain first rent reviews
- FA 2003 Schedule 17A para 12A — agreements for lease that are substantially performed
- FA 2003 section 44 — when a contract has been substantially performed
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
- The supplied material does not give the lease term, the rent after review, or an SDLT amount.
- The supplied current statutory text does not by itself verify the historic wording that applied to the example’s 2004 and 2006 transactions.
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 signed agreement for lease and actual lease
- The dates of occupation, first rent payment and other substantial performance
- The lease commencement date and the first review clause
- The historic legislation in force on the relevant transaction dates
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: five-year rent reviews after an agreement for lease [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 7 - how SDLT treats variable or uncertain lease rent https://www.legislation.gov.uk/ukpga/2003/14/schedule/17A/paragraph/7/2025-11-17 - FA 2003 Schedule 17A para 7A - special timing rule for certain first rent reviews https://www.legislation.gov.uk/ukpga/2003/14/schedule/17A/paragraph/7A/2025-11-17 - FA 2003 Schedule 17A para 12A - agreements for lease that are substantially performed https://www.legislation.gov.uk/ukpga/2003/14/schedule/17A/paragraph/12A/2025-11-17 - FA 2003 section 44 - when a contract has been substantially performed https://www.legislation.gov.uk/ukpga/2003/14/section/44/2025-11-17 Guidance page from HMRC on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm13180 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 - The supplied material does not give the lease term, the rent after review, or an SDLT amount. - The supplied current statutory text does not by itself verify the historic wording that applied to the example's 2004 and 2006 transactions. 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: five-year rent reviews after an agreement for lease
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