Stamp duty and lease payments made before the lease starts
Pre-grant lease payments
For SDLT lease-rent rules, a payment covering time before a lease is granted is not rent. Check the documents and dates carefully.
- Compare the payment period with the grant date
- Do not rely on the payment label alone
- Consider whether other SDLT rules may still matter
Scroll down for the full analysis.
Read the original guidance here:
Stamp duty and lease payments made before the lease starts
When you pay for a period before a lease is formally granted, the payment does not count as rent for this part of the stamp duty calculation. Dates matter. What appears to be ordinary rent may sit outside the lease-rent rules.
What this rule is about
Stamp duty land tax can apply to rent under a lease. The law sets out a method for calculating the value of that rent across the lease term.
For this purpose, a lease cannot have rent for any time before its grant. That is the rule.
What the official source says
The supplied HMRC page is a contents page, directing readers to further HMRC manual pages that discuss payments described as rent for a period before a lease grant.
Those pages provide further guidance.
The legislation puts it more clearly: a payment for a period before the lease grant is not rent for Schedule 5.
- The payment must be for granting the lease.
- It must relate to a period before the grant.
- It is excluded from the Schedule 5 rent calculation.
What this means in practice
Before adding a payment labelled “rent” to the lease-rent figures, carefully check the period it actually covers and compare that period with the lease grant date.
Labels can mislead.
- Keep the payment demand and completion statement.
- Compare the covered period with the lease grant date.
- Check whether the documents describe another reason for the payment.
How to analyse it
Begin with the documents rather than the label on an invoice. A label may help, but it does not determine what a payment was for.
- Find the date the lease was granted.
- List each amount paid for the lease.
- Identify the time period each amount covers.
- Separate payments for time before the grant from later rent.
Example
Priya signs a lease granted on 1 July. She pays £6,000 said to cover May and June. Those two months come before the grant. Under this rule, the £6,000 is not rent for the Schedule 5 lease-rent calculation. That does not alone decide its wider SDLT treatment.
Why this can be difficult in practice
Parties often begin lease deals before they sign the final document, and they may pay money while they are still agreeing terms or under a separate agreement.
This can make the payment’s true purpose hard to pin down.
- Calling an amount rent does not answer the date question.
- A payment may cover more than one period or purpose.
Key takeaways
- Pre-grant period payments are not rent for Schedule 5.
- The lease date and payment period are vital evidence.
- The exclusion does not settle every SDLT question about the payment.
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 5 para 1A — excludes pre-grant period payments from rent
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 a payment truly relates to time before the grant can depend on the lease terms, payment wording and dates.
- This rule says what is not rent for Schedule 5. It does not, by itself, settle the tax treatment of the payment under other SDLT rules.
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 lease and any agreement made before it
- The lease grant date and the period covered by each payment
- Invoices, rent demands and completion statements
- Terms explaining what each payment was made for
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 and lease payments made before the lease starts [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 5 para 1A - excludes pre-grant period payments from rent https://www.legislation.gov.uk/ukpga/2003/14/schedule/5/paragraph/1A/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/sdltm17105 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 a payment truly relates to time before the grant can depend on the lease terms, payment wording and dates. - This rule says what is not rent for Schedule 5. It does not, by itself, settle the tax treatment of the payment under other SDLT rules. 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 and lease payments made before the lease starts
Search Land Tax Advice with Google
