Stamp duty and leases with no fixed end date
Indefinite-term leases
For SDLT, a lease with no fixed end date is first treated as a one-year lease. The treated term increases by one year each time it continues.
- Periodic tenancies can be included
- Tenancies at will can be included
- Scotland has separate land tax rules
Scroll down for the full analysis.
Read the original guidance here:
Stamp duty and leases with no fixed end date
A lease with no agreed end date is not ignored for stamp duty. In England and Northern Ireland, SDLT treats it as a one-year lease at first, then as a longer lease if it carries on.
What this rule is about
Some lettings run from week to week, month to month, or until someone gives notice, leaving the parties without a final date in the agreement even though SDLT still needs a lease term to assess the transaction. This rule fills that gap.
For that reason, the law uses a rolling approach. SDLT supplies a fixed lease term, rather than one agreed by the parties.
What the official source says
HMRC has archived the supplied page. Its only current text says that Scotland moved from SDLT to Land and Buildings Transaction Tax from April 2015, so it does not provide the definition or treatment needed here. That notice is guidance, not the legal definition.
Instead, the legislation contains the definition and sets out the treatment. It explains how SDLT assigns a term when the parties have left the duration open and the letting may continue without a final date. The law applies these stages:
- A lease with an indefinite term begins as a one-year fixed lease.
- If it continues, SDLT treats it as a two-year fixed lease.
- Again, it becomes a three-year fixed lease.
- This includes a periodic tenancy, such as a monthly tenancy.
- It also includes a tenancy at will.
- Either side’s anytime notice right counts.
What this means in practice
An agreement’s label does not decide the issue. Ask whether the agreement states a fixed end date, or whether it continues until either side gives notice, because that distinction determines the starting point for SDLT. That answer matters.
- Keep the original agreement and any later changes.
- Check whether the tenant stayed after the first year.
- Review the SDLT position as the arrangement continues.
How to analyse it
Work through the facts in order. A short label can hide a more complicated arrangement.
- Read the clause on the length of the letting.
- Check whether either side can end it by notice.
- Identify when occupation actually began.
- Check whether the lease continued beyond each treated year.
Example
Sam takes a monthly tenancy with no end date. For SDLT, SDLT first treats it as a one-year lease. Eighteen months means two years for SDLT. Depending on the rent and other facts, this may change the SDLT result.
Why this can be difficult in practice
Monthly deals may still create lease terms. For SDLT, labels do not settle the issue. A treated term is supplied by the law and extended as the arrangement continues.
- A document may use an unclear or informal description.
- A later agreement may replace the first arrangement.
- Actual occupation may not match the written paperwork.
Key takeaways
- No end date does not mean no SDLT lease term.
- The treated term starts at one year.
- It rises year by year while the lease continues.
Technical analysis
For advisers, and for anyone who wants to check the law behind this page. You do not need this section to understand the guidance above.
Legislation
- FA 2003 Schedule 17A para 4 — treating indefinite leases as yearly fixed terms
Official guidance
The pages below are HMRC’s guidance. Guidance is not law. It sets out how HMRC reads the legislation, and it is not binding on you, on a tribunal or on a court. Where guidance and the legislation differ, the legislation wins. HMRC can also change or withdraw guidance, and it may not cover your facts.
Where this is not settled
- Whether an arrangement is a periodic tenancy, tenancy at will or another right terminable by notice depends on its wording and how it operates in practice.
- This page does not work out whether tax, a return or an extra payment is due on particular lease facts.
Evidence you would need
This kind of case is decided on the facts of the individual property. These are the records that usually settle it, and the ones an adviser would ask you for.
- The signed lease and any later agreement
- The start date and any stated end date
- The notice and break clauses
- Records showing whether the tenant remained in occupation
Explore this with an AI
Readers often want to test their own situation. Copy the prompt below into ChatGPT, Claude or Gemini. It hands the model the actual legislation for this page rather than letting it answer from memory, and tells it to be explicit about what is uncertain. What comes back is information, not advice – check it against the links above.
I am researching UK Stamp Duty Land Tax (SDLT), which applies in England and Northern Ireland. MY QUESTION Stamp duty and leases with no fixed end date [Replace this with your own situation: what you are buying, the price, the dates, who the buyer is, and what you plan to do with the property.] THE LAW THIS TURNS ON - FA 2003 Schedule 17A para 4 - treating indefinite leases as yearly fixed terms https://www.legislation.gov.uk/ukpga/2003/14/schedule/17A/paragraph/4/2025-11-17 HMRC's guidance page on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm18715 HOW I WANT YOU TO ANSWER 1. Work from the legislation above. Read it before answering. HMRC guidance is HMRC's view of the law, not the law, and does not bind a tribunal or a court. 2. Tell me what the rule actually requires, in plain English. 3. Tell me which facts decide the answer, and which facts would change it. 4. Tell me what evidence I would need to support the position. 5. Be explicit about anything unsettled or fact-sensitive. Do not guess. 6. Your training data has a cutoff and SDLT rates and reliefs change at fiscal events. Say so if you are not sure the law is current. POINTS ALREADY KNOWN TO BE UNCERTAIN ON THIS TOPIC - Whether an arrangement is a periodic tenancy, tenancy at will or another right terminable by notice depends on its wording and how it operates in practice. - This page does not work out whether tax, a return or an extra payment is due on particular lease facts. Do not give me a conclusion you cannot support from the provisions above.
Legislation links show Finance Act 2003 as it stood on 2025-11-17. The law may have changed since, and the rules that apply are those in force on the date of your transaction. The official guidance this page is based on is here.
This page was last updated on 1 September 2026
Useful article? You may find it helpful to read the original guidance here: Stamp duty and leases with no fixed end date
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