Leases for Indefinite Term: Detailed Content and Guidelines

SDLT and Leases with No Fixed End Date

For Stamp Duty Land Tax, a lease does not escape tax treatment just because it has no fixed expiry date. Where a lease is indefinite, periodic, or continues until notice is given, you still need to work out how its term is treated under the SDLT rules, because the term affects how tax on rent is calculated.

• An indefinite lease is a recognised SDLT issue because lease term is central to the tax calculation.
• You should check the actual wording carefully, as some leases that seem open-ended may still contain a hidden or contingent end point.
• It is important to identify whether the arrangement is a formal lease, a periodic tenancy, or a continuation after an earlier fixed term.
• The way the tenancy ends, such as by notice or on a specified event, can affect how the term is treated for SDLT.
• The legal label is not enough on its own; the statutory SDLT rules and the true legal nature of the tenancy determine the tax result.
• Later events such as renewal, continuation, or termination may create further SDLT consequences.

Scroll down for the full analysis.

SDLT and leases for an indefinite term

This page explains how Stamp Duty Land Tax looks at a lease that does not state a fixed end date. The source material is very brief, but the practical issue is important: SDLT on leases depends heavily on the length of the term, so you need a way to treat a lease where the duration is open-ended or uncertain.

What this rule is about

For SDLT purposes, the term of a lease matters because it affects how the grant of the lease is taxed. In particular, the calculation of tax on rent depends on the lease term. If a lease is granted for a fixed number of years, the position is usually straightforward. If the lease is expressed to continue indefinitely, or without a clear fixed expiry date, the tax analysis becomes less obvious.

The source page sits within HMRC material on the term of a lease and specifically concerns leases granted for an indefinite term. That tells you the legal question being addressed: how to treat a lease where the duration is not fixed in the usual way.

What the official source says

The supplied source is only a contents page heading for HMRC manual SDLTM18710, under the topic “Term of a lease: Leases for an indefinite term”. It indicates that HMRC treats leases for an indefinite term as a distinct issue within its SDLT guidance on lease duration.

Although the extracted text does not include the substantive guidance itself, the significance of the heading is clear: when a lease does not have a conventional fixed term, you still need to determine how SDLT applies by identifying how the lease term is to be treated for tax purposes.

What this means in practice

If a lease is indefinite, you should not assume that SDLT can be ignored or that the lease has no tax term at all. The tax system still needs the transaction to be analysed by reference to a term.

In practice, the first question is what the lease actually says. Some leases look indefinite at first glance but in fact contain machinery that determines when they end. Others may continue from period to period until one party gives notice. Others may arise by operation of law or by holding over after an earlier fixed term.

This matters because the SDLT treatment of lease rent depends on the duration attributed to the lease. If the legal analysis of the term is wrong, the SDLT return and tax calculation may also be wrong.

How to analyse it

A sensible way to approach an indefinite-term lease is to work through the following points:

• Identify whether there is truly no fixed term, or whether the lease contains an end point that is simply contingent or easy to miss.
• Check whether the arrangement is a formal lease, a periodic tenancy, or a continuation after an earlier lease has ended.
• Look at how the tenancy can be brought to an end. For example, does it continue unless notice is given, or until a specified event happens?
• Consider whether the legislation gives a deemed term for SDLT purposes, rather than relying only on the label used in the lease.
• Separate the legal nature of the tenancy from the tax calculation. A tenancy may be indefinite in ordinary property law language, but SDLT may still require it to be treated in a particular way.
• Check whether later events, such as continuation, renewal, or termination, trigger further SDLT consequences.

The key point is that “indefinite” is not the end of the analysis. It is the start of it.

Example

Illustration: a tenant is granted occupation rights that continue from month to month with no fixed expiry date, unless either party gives notice. A reader might describe this as an indefinite lease. For SDLT purposes, however, the transaction still has to be analysed under the rules that determine the lease term and the tax treatment of rent. The fact that the parties did not choose a fixed number of years does not by itself remove the transaction from the lease rules.

Why this can be difficult in practice

The difficulty is that “indefinite term” can cover several different legal situations. A lease may be periodic from the outset, it may continue after expiry of a fixed term, or it may be drafted in an unusual way that makes the end date uncertain. Those situations are not necessarily treated identically.

Another difficulty is that HMRC manual headings do not by themselves state the law. The legislation governs the tax result. HMRC’s manual can help show HMRC’s view, but the actual SDLT treatment depends on the statutory rules and the legal character of the tenancy.

So if all you have is a short manual heading, you should be careful not to infer more than it actually says. The detailed lease wording and the statutory framework remain crucial.

Key takeaways

• A lease with no fixed expiry date still needs to be analysed for SDLT purposes.
• The real issue is the legal character of the tenancy and how the SDLT rules treat its term.
• You should not rely on the word “indefinite” alone; the drafting, notice provisions, and statutory rules all matter.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Leases for Indefinite Term: Detailed Content and Guidelines

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