Stamp duty on rent before a backdated lease is signed
Rent before a lease is granted
A backdated lease does not automatically put earlier months’ rent into the SDLT rent calculation. The payment’s true legal basis matters.
- Rent under an old lease may be treated differently from rent for a new lease.
- HMRC’s examples are fact-sensitive guidance, not law.
- Check the old lease, new lease and payment records together.
Scroll down for the full analysis.
Read the original guidance here:
Stamp duty on rent before a backdated lease is signed
The parties to a lease can state that its term began months before they signed it. That does not mean all rent for those earlier months goes into the stamp duty land tax, or SDLT, rent calculation. The key question is what the payment was really for.
What this rule is about
Businesses sometimes agree leases late but set an earlier start date in the written lease. This often happens when a tenant stays in a shop or office after an old lease ends while the tenant and landlord negotiate a new deal.
The dates can look odd. You may sign a lease in July which says its term began in January. The tenant may also have paid rent during those six months.
For SDLT, the calculation values future rent through net present value, usually called NPV. This is a way of putting a value today on rent due over the life of the lease.
What actually matters? Not simply the start date printed in the new lease. You need to identify which lease each payment relates to.
What the official source says
The law says that an amount payable for the grant of a lease, but relating to a period before the landlord grants that lease, is not rent for SDLT purposes. HMRC’s manual then gives examples of how it applies that point.
- If no rent can be recovered for the earlier period, there is no earlier rent to include in the NPV calculation.
- A lease can have a backdated start date without creating rent for the months before it was signed.
- Rent already paid under an old lease during a holding-over period may be outside the new lease calculation.
- An increase paid during that period may need separate treatment.
- A backdated new lease for the same or substantially the same premises has a special rule where the tenant held over after the old lease ended.
HMRC’s second example deliberately depends on the facts. It separates the old £50,000 yearly rent from a later £20,000 yearly increase. HMRC says the answer turns on whether that increase was for the new lease.
What this means in practice
Do not add every payment made since the old lease expired to the rent in the new lease. These examples aim to prevent that mistake.
First, identify the legal basis for the payment. Was it due under the old lease, paid while negotiations continued, or paid as the price of the new lease?
- Keep the old lease, including its end date and rent clauses.
- Keep the new lease, especially its date and stated start date.
- Match payments to the period they cover.
- Check correspondence about any higher rent.
- Check whether SDLT was paid on the old lease.
If your papers show that the old lease rent continued unchanged, HMRC’s example treats that old rent differently from an increase linked to the new lease. Labels alone will not settle it.
How to analyse it
Work through the timeline before using an SDLT calculator. A calculator cannot decide what a payment was for.
- Find the date when the old lease ended.
- Find the date when the new lease was actually granted.
- Note the date from which the new lease says its term starts.
- List each rent payment made in the gap.
- Ask whether each payment was due under the old lease or for the new lease.
- Identify any increase above the old rent.
- Check whether the old lease was subject to SDLT or the earlier stamp duty system.
- Calculate the NPV using only rent that counts for the relevant SDLT calculation.
There is also a statutory rule for a tenant who remains after the contractual end date and then receives a backdated lease of the same or substantially the same premises. It reduces the new lease rent for the gap by taxable rent paid otherwise than under that new lease. It cannot reduce the new lease rent below zero.
Example
HMRC’s first example involves a retail unit. On 1 July 2015, the landlord grants a five-year lease at £45,000 a year, but its written term starts on 1 January 2015. No rent can be recovered for 1 January to 30 June.
HMRC therefore leaves those six earlier months out of the rent calculation. It counts £45,000 for each full year from 1 July 2015, then £22,500 for the final six months to 31 December 2019. HMRC gives an NPV of £184,232.
The important point is not the figure. It is why the first six months are ignored: there was no recoverable rent for them.
Why this can be difficult in practice
Holding over can be informal. The tenant stays, keeps paying, and the new paperwork arrives much later. That makes it hard to tell whether a payment belongs to the old arrangement or the new one.
- A backdated start date does not, by itself, prove that earlier rent belongs to the new lease.
- Rent paid under an old lease may have a different SDLT result from extra rent agreed for a new lease.
- HMRC’s historic example discusses both pre-SDLT stamp duty leases and SDLT leases.
- Its reference to a 30-day return rule should not be used as a current general deadline.
- The current wording of Schedule 17A has separate rules for a return where holding over makes a lease notifiable and for a further return where extra tax becomes due.
That distinction sounds small. It can change both the tax calculation and what must be filed.
Key takeaways
- Do not treat a backdated lease start date as rent by itself.
- Check what each payment during the gap was actually for.
- Use HMRC’s examples as guidance, but apply the legislation to the facts.
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 amounts from rent
- FA 2003 Schedule 5 para 2 — uses net present value of rent
- FA 2003 Schedule 5 para 3 — sets the net present value calculation
- FA 2003 Schedule 17A para 3 — return deadline when a holding-over lease becomes notifiable; further return deadline for additional tax; tax calculation date for continued leases
- FA 2003 Schedule 17A para 9A — backdated new leases for tenants holding over
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 money paid during a holding-over period relates to the old lease or the new lease can depend on the documents and surrounding facts.
- The source does not set out all facts needed to decide when an increase is paid for the grant of a new lease.
- The source gives historic examples. The correct treatment and filing obligations depend on the transaction dates and the legislation then in force.
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 old lease and its expiry date
- the new lease and its stated start date
- records of occupation and rent paid while holding over
- letters or agreements explaining any rent increase
- earlier SDLT returns or stamp duty documents for the old 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 on rent before a backdated lease is signed [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 amounts from rent https://www.legislation.gov.uk/ukpga/2003/14/schedule/5/paragraph/1A/2025-11-17 - FA 2003 Schedule 5 para 2 - uses net present value of rent https://www.legislation.gov.uk/ukpga/2003/14/schedule/5/paragraph/2/2025-11-17 - FA 2003 Schedule 5 para 3 - sets the net present value calculation https://www.legislation.gov.uk/ukpga/2003/14/schedule/5/paragraph/3/2025-11-17 - FA 2003 Schedule 17A para 3 - return deadline when a holding-over lease becomes notifiable https://www.legislation.gov.uk/ukpga/2003/14/schedule/17A/paragraph/3/2025-11-17 - FA 2003 Schedule 17A para 3 - further return deadline for additional tax https://www.legislation.gov.uk/ukpga/2003/14/schedule/17A/paragraph/3/2025-11-17 - FA 2003 Schedule 17A para 3 - tax calculation date for continued leases https://www.legislation.gov.uk/ukpga/2003/14/schedule/17A/paragraph/3/2025-11-17 - FA 2003 Schedule 17A para 9A - backdated new leases for tenants holding over https://www.legislation.gov.uk/ukpga/2003/14/schedule/17A/paragraph/9A/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/sdltm17115 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 money paid during a holding-over period relates to the old lease or the new lease can depend on the documents and surrounding facts. - The source does not set out all facts needed to decide when an increase is paid for the grant of a new lease. - The source gives historic examples. The correct treatment and filing obligations depend on the transaction dates and the legislation then in force. 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 on rent before a backdated lease is signed
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