Stamp duty on an indefinite lease that carries on
In short
An open-ended lease can be treated as a longer fixed-term lease as it continues. That may change the SDLT result.
- Check the lease wording
- Track how long it has continued
- Check whether another SDLT return is triggered
Scroll down for the full analysis.
Read the original guidance here:
Stamp duty on an indefinite lease that carries on
For an open-ended lease in England or Northern Ireland, stamp duty land tax does not stop at the first year. Initially, it counts as one year. Carrying on can lengthen the term. That can mean extra tax or another return.
What this rule is about
Some leases have no fixed end date. They may run from month to month, or end only when someone gives notice. The law needs a working lease length so it can apply SDLT.
Continuation can change its SDLT position.
What the official source says
The supplied HMRC manual page is archived. Although the supplied HMRC manual page is archived, its only text says that SDLT stopped applying to Scottish land transactions from April 2015, when LBTT took over. It does not explain the rule in its title.
- HMRC’s archive notice is guidance, not the law.
- Scotland has its own land tax from April 2015.
- The statutory rule for England and Northern Ireland is in Schedule 17A.
What this means in practice
Initially, it counts as one year. If it remains in place after the legislation initially treats it as a fixed lease of one year, it counts as two years, then three years, and so on as it continues. The treated term lengthens.
- A periodic tenancy can fall within this rule.
- A tenancy that ends by notice can also fall within it.
- Extra tax may arise as the treated term becomes longer.
- A further SDLT return may be needed in some cases.
How to analyse it
Start with the wording of the lease, rather than the label used by the landlord or tenant. What matters is whether it has a fixed term or can continue without one.
- Read the start date and ending terms.
- Check whether either side can end it by notice.
- Work out how long it has actually continued.
- Check whether a return was already made.
- Test whether the longer treated term changes the tax.
Example
Asha takes a monthly tenancy with no agreed final date. Initially, SDLT treats it as one year. It then counts as two years. If it continues again, the treated term becomes three years.
Why this can be difficult in practice
A lease may look temporary in everyday terms but still be indefinite in law. Later documents, renewals and the way both sides acted can therefore matter.
- Calling an arrangement “rolling” does not settle the answer.
- A fixed lease that continues can involve different rules.
- The return deadline depends on the precise statutory trigger.
Key takeaways
- An indefinite lease starts as a one-year lease for most SDLT purposes.
- Each continued year can lengthen the treated lease term.
- The archived HMRC page does not provide the full rule.
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 longer fixed-term leases
- FA 2003 section 77 — which land transactions need an SDLT return
- FA 2003 section 77A — exceptions from the SDLT return requirement
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
- The facts and lease terms must show whether the arrangement is truly for an indefinite period.
- The supplied source does not give enough detail to calculate any tax due.
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 or notice.
- The start date, rent, payments and period for ending the lease.
- Details of any SDLT return already filed.
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 on an indefinite lease that carries on [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 longer fixed-term leases https://www.legislation.gov.uk/ukpga/2003/14/schedule/17A/paragraph/4/2025-11-17 - FA 2003 section 77 - which land transactions need an SDLT return https://www.legislation.gov.uk/ukpga/2003/14/section/77/2025-11-17 - FA 2003 section 77A - exceptions from the SDLT return requirement https://www.legislation.gov.uk/ukpga/2003/14/section/77A/2025-11-17 Guidance page from HMRC on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm18730 HOW I WANT YOU TO ANSWER 1. Work from the legislation above. Read it before answering. Guidance from HMRC is its 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 - The facts and lease terms must show whether the arrangement is truly for an indefinite period. - The supplied source does not give enough detail to calculate any tax due. 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 on an indefinite lease that carries on
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