Continuation of Lease by Tacit Relocation: Example and Tax Update

SDLT and tacit relocation in Scotland

This archived guidance relates to an old Scottish lease issue under SDLT: whether a lease continuing automatically by tacit relocation affected notification or tax treatment. The source only confirms that HMRC had guidance on this point, but not the detailed outcome. The key practical point is that SDLT stopped applying to Scottish land transactions from April 2015, when LBTT replaced it, so the archived SDLT material is mainly relevant to older cases.

• Tacit relocation is a Scots law rule where a lease continues automatically if neither party properly ends it.
• The missing HMRC example appears to have concerned SDLT notification when a Scottish lease continued in this way.
• From April 2015, Scottish land transactions moved from SDLT to Land and Buildings Transaction Tax (LBTT).
• For Scottish lease issues, the first step is to check the date of the transaction and decide whether SDLT or LBTT applies.
• The tax result may differ depending on whether the event is treated as a simple continuation, a variation, an extension, a renewal, or a new lease.
• Archived HMRC guidance may show HMRC’s past view, but the legal position depends on the legislation in force at the relevant time.

Scroll down for the full analysis.

SDLT and tacit relocation in Scotland: archived guidance on continuation of a lease

This page concerns an old SDLT issue for Scottish leases: what happens when a lease continues automatically by tacit relocation. The source material provided is only a title and an archive notice, so the main point that can safely be drawn is limited. It indicates that this was HMRC guidance on an SDLT notification example, but that from April 2015 SDLT stopped applying to land transactions in Scotland and was replaced by Land and Buildings Transaction Tax.

What this rule is about

Tacit relocation is a Scottish property law concept. Broadly, it describes a lease continuing automatically after its original term, unless one of the parties brings it to an end in the proper way. In stamp tax terms, the question is whether that continuation creates a further notifiable event, or otherwise affects the tax treatment of the lease.

The archived page title suggests that HMRC had an example dealing with notification where a lease continued by tacit relocation. However, the actual operative text of that example has not been supplied here, so the detail of HMRC’s reasoning cannot be reproduced from this source alone.

What the official source says

The only substantive statement in the supplied source is the archive notice. It says that from April 2015 SDLT no longer applies to land transactions in Scotland, and that Scottish land transactions are instead subject to Land and Buildings Transaction Tax.

That means any HMRC SDLT guidance on Scottish leases and tacit relocation is now of historical relevance only, except where an older transaction remains governed by SDLT because it took place before the changeover.

What this means in practice

If you are looking at a Scottish lease that continued by tacit relocation, the first practical question is the date of the transaction and which tax regime applies.

If the relevant Scottish land transaction falls within the period when SDLT still applied, archived HMRC SDLT material may still matter. If the transaction is from April 2015 onwards, the SDLT manual is not the governing regime for Scottish land transactions, and you would need to consider LBTT instead.

The page title also shows that notification was the issue under discussion. In practice, that usually matters because lease continuations, extensions, variations, or deemed new leases can affect filing obligations and tax calculations. But the exact SDLT treatment of tacit relocation cannot be stated confidently from this source extract alone, because the example itself is missing.

How to analyse it

A sensible way to approach this issue is:

• Identify whether the land is in Scotland.
• Check the effective date of the original lease transaction and any later continuation.
• Decide whether the case is governed by historic SDLT rules or by LBTT.
• Establish whether the lease has merely continued automatically under Scots law, or whether there has also been a variation, extension, renewal, or new agreement.
• Consider whether the question is about tax liability, notification, or both. These are related but not always identical issues.
• If relying on archived HMRC material, confirm the underlying legislation and whether the manual was addressing a specific factual pattern only.

Example

Illustration: a tenant in Scotland entered into a lease before April 2015. The lease reached the end of its stated term, but neither side served the notices needed to terminate it, and it continued by tacit relocation. In that situation, the old SDLT regime may still be relevant because the transaction belongs to the pre-LBTT period. By contrast, if a comparable Scottish lease issue arises from April 2015 onwards, the SDLT manual is not the primary source because LBTT applies instead.

Why this can be difficult in practice

The main difficulty here is that the supplied source is incomplete. A page title referring to an example does not tell us the facts of the example, the legislative provision being applied, or HMRC’s conclusion.

There is also a wider legal difficulty with lease continuation issues. A lease can continue in different ways, and the tax outcome may depend on whether the law treats the event as a continuation of the existing lease, a new lease, or something deemed to occur for tax purposes. Small factual differences can matter.

Finally, archived HMRC guidance is not the same as legislation. It may show HMRC’s view at the time, but the legal answer depends on the statute in force for the relevant period, and for Scottish transactions after April 2015 the relevant regime is LBTT, not SDLT.

Key takeaways

• The supplied source only confirms that this was an archived HMRC SDLT page about tacit relocation and notification.
• From April 2015, SDLT no longer applied to Scottish land transactions; LBTT applies instead.
• For any Scottish lease continuation issue, first identify the date and the correct tax regime before considering the detailed tax treatment.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Continuation of Lease by Tacit Relocation: Example and Tax Update

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