Surrender and Grant of Lease: Example 4 – Page Archived

Archived HMRC guidance on surrender and regrant of Scottish leases

This archived HMRC manual page concerns cases where an existing lease is given up and replaced with a new lease on different terms, such as a longer term or higher rent. Its practical value is limited because the example itself is not provided, and for Scottish land transactions from April 2015 onwards SDLT no longer applies, so LBTT is usually the relevant tax instead.

• A surrender and regrant can be treated as a new lease transaction for tax purposes, rather than a simple change to the old lease.
• The archived page relates specifically to a new lease that increases the term, the rent, or both.
• The official source gives very little detail, so it should not be relied on alone to decide the tax treatment of a real case.
• For Scottish property transactions from April 2015 onwards, SDLT is generally replaced by LBTT.
• In practice, you should check the property location, the transaction date, and whether the lease was truly varied or actually surrendered and replaced.

Scroll down for the full analysis.

SDLT and Scottish leases: archived HMRC example on surrender and regrant

This page is about an archived HMRC manual entry dealing with a lease that is surrendered and replaced with a new lease on different terms, such as a longer term or a higher rent. The source itself contains almost no substantive guidance. Its main practical significance is that it sits in an SDLT manual section and carries a warning that, from April 2015, SDLT no longer applies to land transactions in Scotland.

What this rule is about

The wider legal issue is what happens for stamp tax purposes when an existing lease is given up and a new lease is granted in its place. In SDLT terms, a surrender and regrant can amount to a new land transaction. That matters because the tax position may need to be worked out by reference to the new lease, rather than by treating the arrangement as a simple variation of the old one.

The archived page heading suggests a specific scenario: the existing lease is surrendered and a new lease is granted to increase the term, the rent, or both. In practice, those changes can be important because lease term and rent are central features in working out the tax treatment of a lease transaction.

What the official source says

The supplied source does not set out the example itself. It only identifies the manual page as “SDLTM18800 – Term of a lease: Surrender of existing lease and grant of new lease to increase the term and/or increase the rent: Example 4” and states that the page is archived.

It also says that from April 2015 SDLT no longer applies to land transactions in Scotland, because those transactions are instead subject to Land and Buildings Transaction Tax.

So, based on the material provided, the only firm points that can be taken from the official source are:

• the topic concerns surrender and regrant of a lease where the new lease increases the term or rent
• the page is part of HMRC’s SDLT manual material
• the page is archived
• for Scottish land transactions from April 2015 onwards, SDLT is not the relevant tax

What this means in practice

If you are dealing with a lease of Scottish property, the first question is the date of the transaction. If the transaction is from April 2015 onwards, SDLT is generally not the relevant regime. You would instead need to consider LBTT.

If you are looking at an older Scottish transaction, or using archived SDLT material for historical background, the topic remains relevant because a surrender and regrant may trigger a fresh tax analysis. The practical point is that extending a lease or increasing the rent is not always just an amendment to an existing arrangement. In some cases, tax law treats the old lease as ending and a new one as beginning.

That distinction matters because the tax consequences of a new lease can differ from those of a mere variation. The charge may depend on the terms of the replacement lease and the effective date of the new transaction.

How to analyse it

Given the limited source material, a sensible framework is:

• Identify the property jurisdiction. If the land is in Scotland, check whether the transaction falls before or after the start of LBTT in April 2015.
• Identify what actually happened to the lease. Was the original lease simply varied, or was it surrendered and replaced?
• Check which terms changed. The page heading points specifically to an increase in the term, the rent, or both.
• Establish the relevant tax regime. For Scottish transactions from April 2015 onwards, consider LBTT rather than SDLT.
• For historical SDLT analysis, treat archived manual material with care. A manual explains HMRC’s view, but the legal position ultimately depends on the legislation and, where relevant, case law.

Example

Illustration: a tenant of Scottish commercial premises has an existing lease. The parties agree to give up that lease and replace it with a new one that runs for longer and requires more rent. If this happened after SDLT ceased to apply in Scotland, the transaction should not be analysed under SDLT simply because an old HMRC manual page discusses surrender and regrant. The starting point would be the LBTT rules instead.

Why this can be difficult in practice

The main difficulty here is that the supplied source is only a page title and an archive notice. It does not contain the example or the reasoning behind it. That means it cannot safely be used on its own to determine the tax result of a real case.

A second difficulty is that readers often use old HMRC manual pages without checking whether the tax regime has changed. For Scottish land, that is especially important because the archive notice expressly says SDLT no longer applies from April 2015.

A third difficulty is the distinction between a variation and a surrender and regrant. That can be highly fact-sensitive, and the tax consequences may differ significantly depending on the legal effect of the parties’ arrangement.

Key takeaways

• The archived source concerns lease surrender and regrant where the new lease increases the term or rent.
• The supplied text does not include the substantive example, so it gives only very limited guidance on the actual tax treatment.
• For Scottish land transactions from April 2015 onwards, SDLT is not the relevant tax; LBTT must be considered instead.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Surrender and Grant of Lease: Example 4 – Page Archived

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