SDLT Lease Premium Calculation Example 2: Relevant Rental Figure Explained

SDLT on Lease Premiums and the Relevant Rental Figure

This archived guidance concerns an older SDLT rule for the grant of a lease where a premium is paid. The main point is that, in some cases, the SDLT treatment of the premium was not worked out on its own, because a “relevant rental figure” linked to the lease rent could affect the calculation. The material is mainly useful for reviewing historic transactions and must be read using the law and rates in force at the time.

  • Under SDLT, a lease can have two separate chargeable elements: the premium and the rent.
  • The “relevant rental figure” was part of an older method for calculating SDLT on a lease premium in certain cases.
  • When checking an older transaction, you need to confirm the date, whether it was a lease grant, whether a premium was paid, and what rent the lease required.
  • Historic lease SDLT rules changed over time, so archived examples must be matched to the correct version of the law.
  • For Scottish land transactions from April 2015 onwards, SDLT generally does not apply and LBTT is usually the correct tax instead.

Scroll down for the full analysis.

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SDLT on a lease premium: what “relevant rental figure” means in Example 2

This page concerns an older SDLT rule used when working out tax on the grant of a lease for a premium. In particular, it refers to the “relevant rental figure” in Example 2. The source material is very limited, but the key point is that this sits within the SDLT calculation rules for leases and helps determine how the premium is taxed.

What this rule is about

Under SDLT, the grant of a lease can involve two separate chargeable elements:

  • any premium paid for the lease, and
  • the rent payable under the lease.

These are not always taxed in the same way. The legislation and HMRC guidance historically required a calculation that could depend on a “relevant rental figure” when considering the SDLT treatment of a lease premium.

The archived page title shows that Example 2 was intended to illustrate how that figure works in practice. Although the full worked example is not included in the supplied text, the legal context is the SDLT calculation of tax on lease premiums.

What the official source says

The supplied source identifies the topic as:

  • calculation of SDLT,
  • lease premium,
  • relevant rental figure, and
  • Example 2.

It also states that the page is archived and notes that, from April 2015, SDLT no longer applies to land transactions in Scotland. Since then, Scottish land transactions have generally fallen under Land and Buildings Transaction Tax instead.

So, the official material places this example within the SDLT lease calculation rules and makes clear that it is part of the pre-LBTT SDLT regime for Scotland.

What this means in practice

If you are reviewing an older lease transaction, the question is not simply “Was there a premium?” You also need to ask how the SDLT rules treated that premium in light of the rent payable under the lease.

The phrase “relevant rental figure” matters because lease SDLT is not always a straightforward tax on a lump sum. The rent profile under the lease can affect the calculation. In practice, that means a conveyancer or adviser looking at an historic SDLT position would usually need to identify:

  • whether the transaction was the grant of a lease,
  • whether any premium was paid,
  • what rent was payable under the lease, and
  • which SDLT rules applied at the time of the transaction.

If the transaction involved Scottish land on or after the start of LBTT in April 2015, this archived SDLT material would not govern the tax position for that transaction. It may still be relevant for older transactions, amendments, enquiries, or historical analysis.

How to analyse it

Because the source text is only a page heading and archive note, the safest way to analyse the point is to place it in the wider SDLT framework for leases.

  1. Identify the tax regime

    Check whether the transaction is within SDLT at all. For Scottish transactions from April 2015 onwards, the relevant regime is generally LBTT, not SDLT.

  2. Confirm that the transaction is the grant of a lease

    The lease rules are distinct from the rules for freehold transfers and some other land transactions.

  3. Separate premium from rent

    For SDLT purposes, a lease premium and lease rent are different elements of chargeable consideration. Both may need to be analysed.

  4. Check whether a “relevant rental figure” is needed for the premium calculation

    The page title indicates that this figure is part of the method for calculating SDLT on a lease premium in at least some cases. That means the rent is not merely background information.

  5. Use the correct historic rules and rates

    Lease SDLT rules have changed over time. An archived HMRC example must be read in the context of the law in force at the relevant date.

Example

Illustration only: a tenant takes a lease and pays both an upfront premium and annual rent. When considering SDLT, the adviser cannot assume that the premium is taxed in isolation. If the relevant rules require a “relevant rental figure”, the rent terms of the lease may feed into the SDLT calculation for the premium. The result may differ from what someone would expect if they looked only at the lump sum paid on completion.

Why this can be difficult in practice

The main difficulty here is that the supplied source is incomplete. It identifies the topic but does not include the actual worked example or the underlying calculation steps. That matters because lease SDLT calculations can be technical and highly dependent on the exact statutory wording in force at the time.

There are also two practical risks:

  • confusing archived SDLT material with the current Scottish position under LBTT, and
  • treating a lease premium as if it can always be analysed without reference to the rental terms.

Where a historical transaction is being reviewed, it is important to match the transaction date, location of the land, and lease terms to the correct version of the law and guidance.

Key takeaways

  • This archived page relates to SDLT on lease premiums and the use of a “relevant rental figure” in the calculation.
  • For lease transactions, premium and rent are separate SDLT elements, but the rent may still affect how the premium is treated.
  • For Scottish land transactions from April 2015 onwards, SDLT generally no longer applies and LBTT is the relevant regime instead.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: SDLT Lease Premium Calculation Example 2: Relevant Rental Figure Explained

View all HMRC SDLT Guidance Pages Here

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