SDLT No Longer Applies to Scottish Land Transactions from April 2015

SDLT, Agreements for Lease and Scottish Missives of Let

An agreement for lease is usually a binding contract to grant a lease later, rather than the lease itself. In Scotland, the similar concept is often called missives of let. This distinction matters because tax treatment can depend on whether parties are still negotiating, have entered into a binding contract, or have completed the lease. For Scottish land transactions from April 2015 onwards, SDLT no longer applies and LBTT must be considered instead.

• An agreement for lease normally means a contract that a lease will be granted in the future, not just informal discussions.
• Missives of let are the Scottish equivalent, although the exact legal effect depends on the documents and whether a binding contract has been formed.
• When analysing a lease transaction, check the land’s location, the transaction date, and whether there is negotiation only, a binding contract, or the actual lease.
• The legal label on a document does not decide its effect; a document must be examined to see what rights and obligations it actually creates.
• Older SDLT guidance may still matter for historic Scottish transactions, but for Scottish land from April 2015 onwards the relevant regime is LBTT, not SDLT.

Scroll down for the full analysis.

SDLT and Scottish lease contracts: what “agreements for lease” and “missives of let” mean

This page explains a short but important definitional point in HMRC’s SDLT material. It concerns two types of contract linked to leases: an agreement for lease, and the Scottish equivalent, missives of let. The source also notes that, from April 2015, SDLT no longer applies to land transactions in Scotland, which are instead dealt with under Land and Buildings Transaction Tax.

What this rule is about

In stamp taxes on land transactions, it matters whether parties have only discussed terms, have entered into a binding contract, or have actually granted a lease. Those stages can have different legal and tax consequences.

An agreement for lease is generally a contract under which the parties agree that a lease will be granted in the future. In Scotland, the comparable concept is often referred to as missives of let. These terms matter because SDLT rules have historically had to identify what sort of land transaction has taken place, and when.

The source page is part of HMRC’s definitions section. It does not set out the full tax treatment. Its purpose is simply to flag the meaning of these expressions and to place them in context.

What the official source says

The official source identifies “agreements for lease and missives of let” as defined terms within the SDLT manual. It also states that the page is archived because, from April 2015, SDLT no longer applies to land transactions in Scotland. Scottish land transactions are instead subject to Land and Buildings Transaction Tax.

That means two things:

• for SDLT purposes, the terminology remains relevant for understanding older transactions and transactions outside Scotland where SDLT still applies;
• for Scottish transactions from April 2015 onwards, the relevant tax regime is not SDLT but LBTT.

What this means in practice

If you are looking at a lease transaction, the first practical question is whether you are dealing with:

• negotiations only;
• a binding contract to grant a lease later;
• the actual grant of the lease.

An agreement for lease usually falls into the middle category. It is not merely informal discussion, but it is also not necessarily the lease itself. In Scotland, missives of let perform a similar contractual role in the traditional Scottish conveyancing framework.

This distinction matters because tax analysis often depends on identifying the legal step that has occurred. A contract to grant a lease can be treated differently from the completed lease, and the timing can affect filing and liability questions under the relevant regime.

The archived note about Scotland is also practically important. If the land is in Scotland and the transaction took place from April 2015 onwards, SDLT guidance is no longer the correct starting point. You need to consider LBTT instead.

How to analyse it

When you see the phrase agreement for lease or missives of let, work through these questions:

• Where is the land located: England, Northern Ireland, Wales, or Scotland?
• When did the transaction take place?
• Are the parties still negotiating, or have they entered into a binding contract?
• Has the lease itself actually been granted yet?
• Does the document create immediate rights over land, or only an obligation to grant rights later?

For Scottish transactions, add one further question: is this an older SDLT-era transaction, or a post-April 2015 transaction now governed by LBTT?

This framework helps avoid a common mistake: assuming that all lease-related documents are taxed in the same way. They are not necessarily the same thing in law, even if they are closely connected commercially.

Example

Illustration: a landlord and tenant sign a binding contract in January under which the landlord must grant a 10-year lease once building works are finished. The lease itself is granted in June.

That January document is likely to be analysed as an agreement for lease rather than the lease itself. The June document is the actual lease. The tax analysis would then depend on the applicable rules for that jurisdiction and date.

If the property were in Scotland and the transaction took place after April 2015, SDLT guidance would not be the governing regime. LBTT would need to be considered instead.

Why this can be difficult in practice

The source page is very brief and does not explain the full legal consequences. In practice, difficulty often arises because documents are not always labelled clearly, and labels do not decide their legal effect.

A document called heads of terms may still be non-binding. A document called an agreement may or may not amount to a binding agreement for lease. In Scotland, missives can be formed through an exchange of correspondence, so the point at which a binding contract exists may require careful examination of the documents.

Another difficulty is that older HMRC SDLT material may still be encountered in searches or archived manuals. For Scottish land, that material must be read with care because SDLT ceased to apply there from April 2015.

Key takeaways

• An agreement for lease is generally a contract to grant a lease in the future, not necessarily the lease itself.
• In Scotland, the comparable concept is missives of let, but Scottish land transactions from April 2015 onwards fall under LBTT, not SDLT.
• The practical starting point is to identify the jurisdiction, date, and whether the parties have reached a binding contract or completed the lease.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: SDLT No Longer Applies to Scottish Land Transactions from April 2015

View all HMRC SDLT Guidance Pages Here