Stamp duty where linked leases follow each other
Successive linked leases
For SDLT, a series of linked leases can be treated as one longer lease from the date of the first grant.
- The terms are added together.
- Rent across the series is used.
- The link between the leases is the key issue.
Scroll down for the full analysis.
Read the original guidance here:
Stamp duty where linked leases follow each other
For stamp duty land tax, the law can combine two short leases into one longer lease. That can change the rent calculation. Ask whether the leases cover the same place and arise from one linked arrangement. That is the test.
What this rule is about
When one lease ends and a fresh lease begins immediately, you might expect stamp duty to consider each lease alone, but it does not for a linked run of leases. In this situation, the leases are considered together.
In that situation, the law combines the leases and treats the series as one lease from the date of the first grant, rather than assessing a planned sequence of short terms as separate, shorter deals. This stops that result.
What the official source says
HMRC’s manual gives a simple renewal example. A three-year lease begins on 1 January 2004 at £50,000 a year. Its terms allow renewal at the same rent. On 1 January 2007, the same parties enter a new three-year lease on the same terms.
- The leases are for the same, or much the same, premises.
- The same parties grant them one after another, although they can also grant them together.
- The transactions form one scheme, arrangement or series.
- On those facts, HMRC says the special treatment applies.
Schedule 17A paragraph 5 says that the law treats a qualifying series as one lease, beginning on 1 January 2004, lasting six years, and carrying rent of £50,000 a year throughout. That is the result.
What this means in practice
Rather than calculating the rent tax separately for each three-year term, calculate it on the combined six-year lease, using the rent across the full series. Treat it as one lease.
For that calculation, the law normally uses a discounted value of rent over the lease term instead of merely adding annual rent. That changes the measure.
- Check the first lease as well as the newest document.
- Read any renewal right, option, side letter and agreement for lease.
- Compare the property covered by every lease.
- Keep the dates, terms and rent for the whole sequence together.
How to analyse it
Begin with the link between the leases, not their labels. Calling each agreement a new lease does not settle the point. What matters is the real arrangement between the parties.
- List every lease in date order.
- Ask whether each covers the same or substantially the same premises.
- Consider whether the same parties, or connected parties, made the grants as one scheme, arrangement or series, rather than as separate transactions. That link matters.
- If they do, add the terms and use the rent across the full series.
Example
In HMRC’s example, the first three-year lease runs from 1 January 2004. From 1 January 2007, the replacement also runs for three years, so the two leases together create a six-year term. Accordingly, the terms are combined.
For this rule, the rent remains £50,000 a year across that six-year period. HMRC’s source does not give the resulting tax figure.
Why this can be difficult in practice
In practice, you must often decide whether the separate grants really formed one arrangement, even where a renewal right and identical terms appear as strong facts in HMRC’s example. The facts may point elsewhere.
Different premises, parties, timing or commercial terms may lead to a different answer.
- A gap between leases does not, by itself, answer the question.
- The same parties alone do not prove a single arrangement.
- A changed rent or amended area needs careful comparison.
Key takeaways
- Successive linked leases can be combined into one lease.
- The first grant date fixes the starting date for that combined lease.
- Terms and rent across the series matter, not each lease in isolation.
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 5 — combining successive linked leases for SDLT
- FA 2003 section 108 — when transactions count as linked
- FA 2003 Schedule 5 para 2 — rent valuation using net present value
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 later leases form part of one arrangement depends on the full facts and documents. A renewal right is relevant, but it is not the only point to check.
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.
- Every lease in the sequence
- Any renewal option, side letter or agreement for lease
- Details of the premises covered by each lease
- The parties, dates, terms and rent for each lease
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 where linked leases follow each other [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 5 - combining successive linked leases for SDLT https://www.legislation.gov.uk/ukpga/2003/14/schedule/17A/paragraph/5/2025-11-17 - FA 2003 section 108 - when transactions count as linked https://www.legislation.gov.uk/ukpga/2003/14/section/108/2025-11-17 - FA 2003 Schedule 5 para 2 - rent valuation using net present value https://www.legislation.gov.uk/ukpga/2003/14/schedule/5/paragraph/2/2025-11-17 Guidance page from HMRC on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm17045 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 later leases form part of one arrangement depends on the full facts and documents. A renewal right is relevant, but it is not the only point to check. 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 1 September 2026
Useful article? You may find it helpful to read the original guidance here: Stamp duty where linked leases follow each other
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