SDLT Lease Premium Calculation Example: Relevant Rental Figure Explained

SDLT on a Lease Premium and the Relevant Rental Figure

This guidance explains that, in some SDLT lease cases, tax on a lease premium is not worked out by looking at the premium alone. The rent under the lease may affect the calculation through a defined “relevant rental figure”. However, the source provided is only an HMRC manual heading for “Example 3”, so it does not give enough detail to confirm the exact rule or calculation.

• SDLT on leases can involve two separate elements: a premium paid for the lease and rent payable during the term.
• The “relevant rental figure” is a rent-based amount that may affect how much of the lease premium is chargeable to SDLT.
• The HMRC material supplied is incomplete, so it is only safe to say that the example concerns lease premium calculations, not the exact method used.
• When reviewing a lease transaction, you should check the transaction date, separate the premium from the rent, and confirm which legal rule applies.
• HMRC manual examples are guidance only; the legislation in force at the time of the transaction determines the correct SDLT result.
• For Scottish land, SDLT generally stopped applying from April 2015 and was replaced by Land and Buildings Transaction Tax.

Scroll down for the full analysis.

SDLT on a lease premium: understanding the “relevant rental figure” in Example 3

This page is about a very specific part of the old Stamp Duty Land Tax rules for leases: how the “relevant rental figure” fits into the calculation of SDLT where a lease premium is paid. The source material is sparse and appears to be an archived HMRC manual page for “Example 3”. It also notes that, from April 2015, SDLT no longer applies to land transactions in Scotland, which are instead subject to Land and Buildings Transaction Tax.

What this rule is about

Under SDLT, the tax treatment of leases can involve more than one chargeable element. A lease may involve:

• a premium paid for the grant of the lease, and
• rent payable over the term.

In some lease calculations, the amount of rent is relevant when working out how the premium is taxed. HMRC’s use of the phrase “relevant rental figure” points to that part of the calculation.

The legal issue, in simple terms, is this: when a tenant pays a premium for a lease, SDLT is not always worked out by looking at the premium in isolation. The rent under the lease may affect how much of the premium is taxed, or how the premium calculation is structured.

What the official source says

The supplied source gives only the page title: “SDLTM18430 – Calculation of stamp duty land tax: Lease premium: Relevant rental figure: Example 3”. It does not include the worked example itself or the surrounding text explaining the rule.

From the title alone, the safe conclusions are limited:

• the page concerns SDLT calculation for a lease premium;
• it focuses on the “relevant rental figure” as part of that calculation; and
• it is an example page within HMRC’s SDLT manual rather than the legislation itself.

The archive notice also makes clear that the page relates to SDLT in a historical context for Scotland only. Since April 2015, Scottish land transactions are generally outside SDLT and within LBTT instead.

What this means in practice

If you are dealing with an SDLT lease calculation and the premium is being considered alongside a “relevant rental figure”, the first practical point is that you should not assume the premium is taxed in the same way as a freehold purchase price.

Lease transactions are often calculated under special rules. Those rules may require you to identify:

• the premium actually paid;
• the rent reserved by the lease;
• the figure that counts as the “relevant rental figure” for the purpose of the calculation; and
• whether the legislation reduces, disapplies, or adjusts the part of the premium that is chargeable.

That matters because a mistake in identifying the rental figure can affect the SDLT due on the premium element.

It also matters historically for older transactions, amendments, enquiries, claims, or disputes involving leases granted when SDLT still applied to Scottish land, or for lease transactions elsewhere in the UK where SDLT remains relevant.

How to analyse it

Because the source extract does not include the actual example, the safest way to analyse the issue is to work through the lease calculation methodically.

• Identify the transaction date. This tells you whether SDLT is the right regime at all, especially for Scottish land.
• Separate the premium from the rent. SDLT on leases often treats these as distinct chargeable components.
• Check the statutory rule that uses the “relevant rental figure”. A manual example illustrates HMRC’s view, but the legislation governs the result.
• Confirm what rent counts. In lease cases, the timing, amount, and structure of rent can matter.
• Check whether the example is dealing with a relief, reduction, or special computational rule. The phrase “relevant rental figure” usually appears because rent affects the premium calculation in a defined way.
• Make sure any historical guidance still matches the law in force at the time of the transaction.

If you have only the HMRC example title and not the surrounding text, you should be cautious about drawing a precise conclusion from the title alone. The example may depend on assumptions stated elsewhere in the manual.

Example

This is only an illustration of the type of issue the page is likely addressing, not a reconstruction of HMRC’s missing Example 3.

A tenant takes a lease and pays both:

• a lump-sum premium on grant, and
• annual rent under the lease.

For SDLT purposes, the premium is not necessarily taxed by looking only at the lump sum. The legislation may require part of the rent position to be identified first, using a “relevant rental figure”, before deciding how much of the premium is chargeable. If the rent figure is calculated wrongly, the SDLT on the premium may also be wrong.

Why this can be difficult in practice

The main difficulty here is that the source provided is incomplete. It identifies the subject of the example, but not the actual facts, calculation, or statutory cross-reference.

There are also broader reasons this area can be difficult:

• lease SDLT is more technical than SDLT on a simple freehold purchase;
• manual examples are not legislation and may leave out assumptions;
• the meaning of a rental figure may depend on definitions elsewhere in the legislation or manual; and
• older SDLT material for Scotland now sits in an archived context because LBTT replaced SDLT there from April 2015.

So the key risk is over-reading a manual heading without the underlying worked example and legal rule.

Key takeaways

• The page concerns how rent can affect the SDLT calculation on a lease premium.
• The supplied extract is too limited to state the precise computational rule in Example 3.
• For lease SDLT, always check the legislation and the full worked example rather than relying on the heading alone.

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: Relevant Rental Figure Explained

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