Commentary

RCB/11/20 VAT and Stamp Duty Land Tax when existing leases between landlords and tenants are varied

Part V16 Forms and other HMRC material

RCB/11/20 VAT and Stamp Duty Land Tax when existing leases between landlords and tenants are varied

RCB/11/20 VAT and Stamp Duty Land Tax when existing leases between landlords and tenants are varied

Revenue & Customs Brief, Issue 11. 29 July 2020

1 Purpose of this brief

This brief explains how some arrangements between landlords and tenants affect VAT and Stamp Duty Land Tax (SDLT). There have been no changes to either VAT or SDLT policy but these changes have become more frequent as a result of the COVID-19 pandemic.

2. Who should read this brief

This brief applies to commercial properties. You should read the brief if you are:

  1.  

    •     a landlord

  2.  

    •     a tenant

  3.  

    •     their adviser

3 Background

As a result of the current COVID-19 pandemic, many tenants are suffering a loss of income and want to vary the terms of their lease with their landlord. This may be done either formally or informally. This brief has guidance on the appropriate VAT and Stamp Duty Land Tax (SDLT) treatment of the most common lease variations, specifically those:

  1.  

    •     which vary the amount of rent a tenant pays

  2.  

    •     where a lease extension is being agreed

In all cases, the

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