Guidance on Completing SDLT1 Schedule for Non-Residential or Mixed Property Transactions

SDLT lease schedules for head leases and freeholds subject to leases

HMRC may require extra lease details with an SDLT return where the transaction is the grant of a head lease or the sale of a freehold already subject to leases. The filing rules changed on 1 March 2019, so the correct approach depends on the transaction date, the type of property, and how many leases affect it.

• From 1 March 2019, a single schedule is used for non-residential or mixed transactions involving a head lease grant or a freehold sale subject to leases.
• For the newer schedule, HMRC generally wants only basic details of non-residential tenancies: tenant name, property address, lease start date, and lease end date.
• For returns up to 28 February 2019, older rules applied: one lease could go in the SDLT1 fields, with extra leases shown on the relevant schedule if needed.
• Only one schedule should be completed for each property on the SDLT1, and it must be linked using the required reference numbers, such as the local authority code, transaction reference, and UPRN.
• Where rent must be shown, HMRC wants the rent payable at the effective date of the transaction, excluding VAT and service charges.
• In practice, you should check the transaction date, property classification, whether it is a head lease or freehold transfer, and how many leases affect the property before deciding what must go on the return and any schedule.

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SDLT lease schedules for head leases and freeholds subject to leases

This page explains when extra lease information must be provided with an SDLT return, and what details HMRC expects. The rule matters where the transaction being notified is not just a simple sale, but either the grant of a head lease or the sale of a freehold that is already subject to leasehold interests. In those cases, HMRC may need details of the occupational tenancies affecting the property.

What this rule is about

HMRC’s SDLT return asks for lease details in certain fields. That works for straightforward cases, but it is not enough where a property is subject to multiple leases, or where the transaction itself is the grant of a head lease. HMRC therefore requires additional schedule information so it can identify the tenancies that affect the property.

The source material is mainly about administration: which schedule to use, when it is needed, and what information goes on it. It does not itself set the tax charge. But getting this right still matters, because an incomplete or wrongly completed return can cause processing problems and may lead to follow-up questions.

What the official source says

The source distinguishes between the position before and after 1 March 2019.

From 1 March 2019, the older two-schedule approach stopped. Instead, one schedule is used where:

• the SDLT1 relates to a non-residential or mixed interest, and
• the transaction is either the grant of a head lease or the sale of a freehold subject to one or more leases.

For that newer schedule, HMRC says only details of non-residential tenancies are required, and only these details are needed:

• tenant name
• property address
• start date of lease
• end date of lease

For returns up to the end of February 2019, the older schedules for underleases and subleases were used. Under that older process:

• a schedule was only required where there was a grant of a head lease, or a transfer of a freehold subject to more than one lease
• if a freehold was transferred subject to only one lease, the lease details were entered in questions 16 to 21 of the SDLT1, or fields 1.16 to 1.21 online
• if there was more than one lease, one lease was entered in questions 16 to 21, and the others were listed on the schedule

The source also says only one schedule should be completed for each property notified on the SDLT1.

To match the schedule to the SDLT return, HMRC requires identifying references at the top of the schedule, including:

• the relevant local authority code
• the unique transaction reference number
• the National Land and Property Gazetteer Unique Property Reference Number

The source then lists the information to be entered in the schedule columns. The core items are:

• tenant name
• full property address, including postcode and unit details
• lease start date
• lease end date
• current rent at the effective date of the transaction, excluding VAT and service charges

For the older Schedule 2 used for non-residential or mixed property, HMRC also asked for:

• type of property: residential, non-residential or mixed use
• area of agricultural or development land, if relevant
• date of the next rent review
• date when a break clause could first operate after the effective date

What this means in practice

The practical question is not just “is there a lease?” but “what kind of transaction is being notified, how many leases affect the property, and what filing regime applied at the time?”

If you are dealing with a transaction from 1 March 2019 onwards, the source points to a simplified approach for non-residential or mixed transactions. In those cases, if the transaction is a head lease grant or a freehold sale subject to leases, HMRC wants a single schedule giving basic details of the non-residential tenancies.

If you are looking at an older transaction, the filing mechanics are different. A freehold transfer subject to one lease was dealt with directly in the SDLT1 lease fields. A freehold transfer subject to more than one lease needed extra schedule information for the additional leases. A grant of a head lease also triggered the need for a schedule.

In practical terms, this means the person preparing the return must identify all leases affecting the property and then decide which ones must be disclosed in the form itself and which, if any, belong on the schedule.

The reference to “current rent” also matters. HMRC’s instruction is to state the rent payable under the lease terms at the effective date of the transaction, excluding VAT and service charges. So the figure to use is not necessarily the original rent in the lease if the rent has already changed by the effective date.

How to analyse it

A sensible way to approach this is:

• Identify the date of the transaction. The filing requirements changed on 1 March 2019.
• Decide whether the property interest being notified is residential, non-residential, or mixed.
• Ask whether the transaction is the grant of a head lease or the transfer of a freehold subject to leasehold interests.
• Count how many leases affect the property at the effective date.
• Check whether the return requires only the SDLT1 lease fields, or those fields plus a schedule.
• Make sure the schedule is linked properly to the SDLT1 using the required reference numbers.
• For each lease that must be disclosed, gather the correct tenant name, full address, start date, end date, and where relevant the current rent and any other required schedule data.

Two points are easy to miss.

• The source says only one schedule should be completed for each property notified on the SDLT1. That suggests you should consolidate the relevant lease details for that property rather than sending multiple separate schedules for the same property.
• The source distinguishes between leases to be entered in the SDLT1 itself and leases to be added on the schedule. That distinction depends on the filing regime and the number of leases.

Example

This is an illustration based on the source material.

A company buys the freehold of a mixed-use building. The building is subject to three occupational leases at the effective date. If the transaction falls under the pre-1 March 2019 process, one lease would be entered in questions 16 to 21 of the SDLT1 and the other two would go on the relevant schedule. If the transaction falls under the post-1 March 2019 process and the conditions for the newer schedule are met, the return would use the single schedule for the non-residential tenancies, with the tenant names, addresses, and lease start and end dates.

If one of the leases includes VAT on rent and separate service charges, the “current rent” figure for schedule purposes should exclude those amounts, because the source says VAT and service charges are left out.

Why this can be difficult in practice

The main difficulty is that this is procedural guidance written around HMRC form completion, and the rules changed over time. So the right answer depends heavily on when the return was due and what version of HMRC’s process applied.

Another difficulty is identifying exactly which leases count for disclosure purposes. In straightforward cases, that is obvious. In more complex property structures, it may be less clear whether an arrangement is an underlease, a sublease, or part of a wider head lease structure that needs to be reflected on the return.

The source also refers to non-residential and mixed interests in a way that matters for the schedule used. In practice, classification can itself be a separate SDLT issue. This page does not set out the legal test for whether property is residential, non-residential, or mixed; it simply assumes that classification has already been made correctly.

There is also a practical risk in using the wrong rent figure. HMRC asks for the rent payable at the effective date, not a historic or future figure, and excludes VAT and service charges. If the lease has been varied, reviewed, or partially assigned, the correct figure may need careful checking.

Key takeaways

• Extra lease schedule information is mainly needed where the transaction is a head lease grant or a freehold sale subject to leases.
• The filing mechanics changed on 1 March 2019, so the transaction date matters.
• Where rent is required, HMRC wants the rent payable at the effective date, excluding VAT and service charges.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Guidance on Completing SDLT1 Schedule for Non-Residential or Mixed Property Transactions

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