SDLT Calculation Example: Lease Premium and Relevant Rental Figure Explained

Relevant rental figure in historic SDLT lease premium calculations

This archived HMRC guidance relates to old SDLT rules for Scottish leases before April 2015. Its main point is that SDLT on a lease premium was not always worked out by looking only at the premium paid, because a “relevant rental figure” could also affect the calculation.

• The guidance concerns historic SDLT rules for leases in Scotland before SDLT was replaced by LBTT in April 2015.
• Under those lease rules, SDLT could be charged on the rent, on any premium, or on both.
• The reference to a “relevant rental figure” shows that the rent could affect how the lease premium was taxed.
• The source material is only an example heading, so it does not provide the facts, formula, or result needed to do the calculation.
• For any old SDLT lease review, you need the full lease details, the complete HMRC example, and the underlying legislation before reaching a conclusion.

Scroll down for the full analysis.

SDLT on a lease premium: what “relevant rental figure” means in Example 1

This page concerns a technical part of the old SDLT rules for leases in Scotland before April 2015, when SDLT still applied there. It sits within the calculation of SDLT on a lease premium and refers to the “relevant rental figure”. Although the source text is very brief, the point matters because SDLT on leases historically involved more than one charging element, and the rent figure could affect how the premium was taxed.

What this rule is about

Under the SDLT rules for leases, tax could arise on the rent, on any premium paid for the grant of the lease, or on both. In some cases, the amount of premium treated as chargeable was not looked at in isolation. Instead, the legislation required part of the calculation to take account of a “relevant rental figure”.

The source page is labelled as an example page. That suggests its purpose was to illustrate how that figure operates in practice rather than to set out the whole legal rule. The archived notice also matters: from April 2015, SDLT ceased to apply to land transactions in Scotland and was replaced by Land and Buildings Transaction Tax. So this material is mainly relevant to historic Scottish transactions that were still within SDLT, or to understanding older SDLT rules more generally.

What the official source says

The official source identifies the topic as the calculation of SDLT on a lease premium, specifically the “relevant rental figure”, and says it is “Example 1”. It also states that the page is archived because SDLT no longer applies to land transactions in Scotland from April 2015.

The source content provided does not include the worked facts or the computational steps from the example itself. So the safe conclusion from the material supplied is limited:

• the example formed part of HMRC’s guidance on calculating SDLT on lease premiums;
• the calculation involved a “relevant rental figure”;
• the page related to SDLT rules that are now historic for Scotland.

What this means in practice

If you are looking at an old SDLT lease transaction, especially one involving Scotland before April 2015, you should not assume that SDLT on the premium was calculated simply by applying rates to the cash premium paid. The lease rules were more technical than that. A “relevant rental figure” may have been part of the statutory computation.

In practical terms, that means three things.

First, you need to identify whether the transaction is actually within the historic SDLT regime or instead within LBTT. The archived notice is a reminder that Scotland moved to a different tax from April 2015.

Second, if the transaction is within SDLT, you need the full lease facts before you can work out the premium charge properly. That will usually include the rent terms, the premium, the term of the lease, and any variations in rent.

Third, if you are relying on an HMRC manual example, you need the complete example text. The heading alone tells you the issue being illustrated, but not the result or the reasoning.

How to analyse it

A sensible way to approach this point is:

• Establish the tax regime. Is this an SDLT transaction, or does LBTT apply because the land is in Scotland and the effective date is on or after the Scottish changeover?
• Confirm that the issue is SDLT on a lease, not a freehold transfer or some other land transaction.
• Identify all elements of chargeable consideration under the lease, including any premium and the rent payable.
• Check whether the premium calculation requires use of a “relevant rental figure” under the SDLT lease rules, rather than assuming the premium stands alone.
• Find the full legislative provision and any complete HMRC example before concluding how the computation works.

This is particularly important because HMRC manual pages often break a single topic into several short pages. A heading such as “Example 1” usually depends on surrounding pages that explain the legal rule first.

Example

Illustration: a business took a lease of Scottish commercial property before April 2015 and paid both an upfront premium and annual rent. Someone reviewing the file years later wants to check whether the SDLT return was correct. The heading of this HMRC page tells them that, when looking at the premium charge, they may also need to consider a “relevant rental figure”. It would not be safe to recalculate the tax using only the premium amount without checking the full lease computation rules and the complete worked example.

Why this can be difficult in practice

The main difficulty here is that the supplied source is incomplete. It gives the topic but not the underlying facts, formula, or conclusion from the example. That creates a real risk of over-reading the heading.

There is also a broader practical difficulty with old lease SDLT rules. Lease taxation often involved multiple moving parts, and the interaction between premium and rent was not always intuitive. A reader may wrongly assume that “premium” and “rent” are taxed entirely separately. The reference to a “relevant rental figure” shows that, at least for this part of the SDLT rules, the rent side could affect the premium calculation.

A further complication is jurisdiction and timing. Because Scotland moved from SDLT to LBTT in April 2015, older HMRC SDLT material may still matter for historic cases, but it does not describe the current Scottish tax regime.

Key takeaways

• This archived HMRC page relates to historic SDLT lease rules, not current Scottish LBTT rules.
• The heading shows that SDLT on a lease premium could involve a “relevant rental figure”, so the premium was not always considered in isolation.
• To apply the rule properly, you need the full example or the underlying legislation, not just the page title.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: SDLT Calculation Example: Lease Premium and Relevant Rental Figure Explained

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