Example 9: Calculating Stamp Duty Land Tax for Variable Rent

SDLT and Leases with Variable or Uncertain Rent

This guidance is about how Stamp Duty Land Tax may be worked out when lease rent is not fixed from the start. As the full text of HMRC’s “Example 9” is missing, only the general point can be stated safely: where rent is variable, uncertain or depends on future events, the SDLT position may need assumptions at the filing date and sometimes later review or adjustment.

• SDLT on leases can be affected where rent is not known in full when the lease is granted, such as turnover rent, index-linked rent, stepped rent or rent review clauses.
• The missing Example 9 appears to have been one of HMRC’s worked examples on calculating SDLT for variable or uncertain rent, but its exact facts and outcome cannot be confirmed.
• In practice, the starting point is to check what rent is fixed, what is uncertain, and how the SDLT rules require those amounts to be treated at the effective date.
• Some cases may need a later return or adjustment if the rules require further reporting once the rent position becomes clear.
• The tax regime depends on where the property is: SDLT applies in England and Northern Ireland, while Scotland has LBTT from April 2015 and Wales has Land Transaction Tax.
• HMRC manual examples are useful guidance, but the legal answer always depends on the lease wording and the legislation rather than the manual alone.

Scroll down for the full analysis.

SDLT and variable or uncertain rent: what “Example 9” means

This page concerns how Stamp Duty Land Tax is calculated where rent under a lease is variable or uncertain. The source material provided is only a title reference to “Example 9” in HMRC’s SDLT manual, together with a note that the page is archived and that SDLT no longer applies to land transactions in Scotland from April 2015. Because the substantive example text is not included, the explanation below is limited to what can safely be drawn from that context.

What this rule is about

For SDLT purposes, rent under a lease is not always fixed at the outset. Some leases contain rent review clauses, turnover rent, index-linked rent, stepped rent, or other provisions that mean the total rent payable over the term is not known with certainty when the lease is granted.

That matters because SDLT on leases can depend on the rent payable over the term. If the rent is variable or uncertain, the tax calculation may require assumptions or later adjustment rather than a simple calculation based on a fixed rent figure.

What the official source says

The source title shows that HMRC treated this as part of its guidance on the calculation of SDLT where rent is variable or uncertain, and that the page was one of a series of examples. The archive notice also confirms an important territorial point: from April 2015, SDLT ceased to apply to land transactions in Scotland, which instead fall within Land and Buildings Transaction Tax.

Without the actual text of Example 9, it is not possible to state the precise factual scenario or HMRC’s worked conclusion for that example. What can be said is that the example sat within HMRC’s guidance on how to calculate SDLT where lease rent cannot be stated as a single fixed amount at the effective date of the transaction.

What this means in practice

If a lease includes variable or uncertain rent, the SDLT analysis usually starts by identifying exactly what is known at the outset and what depends on future events. The practical question is not just “what rent might eventually be paid?” but “how does SDLT require that rent to be treated at the time of filing, and is any later return or adjustment needed?”

In practice, a conveyancer or taxpayer would usually need to examine:

• whether the transaction is within SDLT at all, bearing in mind the Scotland carve-out from April 2015;
• whether the payment is properly characterised as rent under a lease;
• whether the rent is fixed, variable, uncertain, contingent, or reviewable;
• what assumptions the SDLT rules require at the effective date; and
• whether later changes trigger any further reporting obligations.

The archived status of the page also matters. Older HMRC manual examples may still help explain SDLT concepts for England and Northern Ireland, but they do not govern LBTT in Scotland. For Welsh transactions, Land Transaction Tax applies instead of SDLT.

How to analyse it

A sensible way to approach a lease with variable or uncertain rent is:

1. Identify the tax regime. Is the land in England or Northern Ireland, so that SDLT applies, or in Scotland or Wales, where different taxes apply?
2. Read the rent clause closely. Is the rent fixed from the start, stepped by reference to dates, linked to turnover, indexed, or contingent on some event?
3. Separate known amounts from unknown amounts. Some leases contain a mixture of fixed base rent and additional variable rent.
4. Check what the legislation and official guidance require for uncertain rent at the effective date. The correct treatment depends on the legal nature of the uncertainty.
5. Consider whether the initial return may need to be revisited later if the rules require a further filing once the rent position becomes known.

Where HMRC manual material uses examples, the purpose is usually to show how these principles apply to a particular rent formula. But the legal answer always depends on the actual lease terms and the statutory rules, not just on the label used in the document.

Example

Illustration: a tenant takes a lease of commercial premises. The lease provides for a fixed annual base rent plus an additional amount based on the tenant’s turnover. At the grant date, the turnover element cannot be known. In that kind of case, the SDLT calculation may not be as straightforward as multiplying a fixed annual rent by the term. The person preparing the return would need to determine how the SDLT rules treat the uncertain element at the outset and whether any later adjustment mechanism applies.

This illustration is general only. The missing text of Example 9 may have dealt with a different type of uncertainty.

Why this can be difficult in practice

The main difficulty is that “variable rent” covers several different situations, and they do not always produce the same SDLT treatment. A stepped rent known from the start is different from a rent that depends on future turnover. A review linked to a formula may be easier to model than a payment contingent on an unknown event.

Another difficulty is source status. HMRC manuals are guidance, not legislation. They are useful for understanding HMRC’s approach, especially where they contain worked examples, but the legal result depends on the statute. If only a manual heading is available and the example text is missing, it would be unsafe to state the exact rule or outcome of that example.

There is also a jurisdiction issue. Archived SDLT material can still be relevant historically or for England and Northern Ireland, but it should not be treated as if it applies unchanged to Scottish LBTT transactions after April 2015.

Key takeaways

• Variable or uncertain rent under a lease can affect how SDLT is calculated and may require more than a simple fixed-rent calculation.
• The source provided does not include the actual text of Example 9, so only the general issue can be explained safely.
• From April 2015, SDLT no longer applies to Scottish land transactions; those fall under LBTT instead.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Example 9: Calculating Stamp Duty Land Tax for Variable Rent

View all HMRC SDLT Guidance Pages Here