Q&As

How does the stamp duty land tax treatment of commercial tenancies differ between a deemed surrender and re-grant on the one hand (by way of a deed of variation), and a reversionary lease on the other?

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Produced in partnership with Sean Randall of Blick Rothenberg
Published on LexisPSL on 12/12/2018

The following Tax Q&A produced in partnership with Sean Randall of Blick Rothenberg provides comprehensive and up to date legal information covering:

  • How does the stamp duty land tax treatment of commercial tenancies differ between a deemed surrender and re-grant on the one hand (by way of a deed of variation), and a reversionary lease on the other?

The stamp duty land tax (SDLT) treatment of a surrender and regrant of a lease over commercial premises is potentially very different to the SDLT treatment of the grant of a reversionary lease over commercial premises; though, both achieve the objective of extending the term of the lease.

Where a lease is varied so as to extend the term of the lease, the variation will take effect as a surrender and regrant. This means that both parties to the lease, the landlord and the tenant, will acquire a chargeable interest for SDLT purposes. The landlord will acquire the surrendered lease and the tenant will acquire the regranted (or new) lease. Normally a special set of rules applies to an ‘exchange’ of chargeable interests like this, which deem the chargeable consideration for each to be no less than the market va

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