Home » SDLT and LTT for Leases

SDLT and LTT for Leases

What is Stamp Duty Land Tax (SDLT)?

SDLT is a tax charged on land transactions on the acquisition of a chargeable interest. This includes the grant of a lease.

SDLT is not charged on a tenancy at will or a licence to occupy, however, care should be taken to ensure that the tenancy at will or licence to occupy is not in fact a lease.

When does SDLT become payable?

SDLT is payable from the date of the grant of the lease. It is important to note that this applies even if the commencement date of the lease is at some point in the future.

SDLT can also be payable by a landlord on the surrender of a lease for a premium.

How is SDLT calculated?

SDLT is payable on any money or money’s worth paid for the transaction. SDLT is payable both on any rent and any premium paid when a lease is granted. This includes any VAT payable on the rent or premium.

SDLT is charged on the net present value of the rent, which is a calculation of the value of the rents payable under the lease during the term of the lease. Currently, the SDLT rates for commercial or mixed-use properties are:

Net present value Rate
£0 to £150,000 0%
Over £150,000 but not more than £5 million 1%
Over £5 million 2%

SDLT is charged on the premium paid for commercial or mixed-use property and the current rates are as follows:

Consideration Rate
Not more than £150,000 0%
More than £150,000, but
not more than £250,000
More than £250,000 5%

If both rent and a premium are payable, the SDLT is calculated separately on each element and then added together.

What are the timelines for paying SDLT?

A land transaction return must be delivered to HMRC and payment of any SDLT due paid to HMRC within 14 days of the date of the transaction.

What is Land Transaction Tax (LTT)?

LTT replaced SDLT for transactions in Wales in 2018. The LTT regime in Wales is largely similar to the SDLT regime in England. Some of the key differences are mentioned below.

What are the LTT rates?

The LTT rates and thresholds differ to the SDLT rates and thresholds.

LTT is charged on the net present value of rent. The current rates are as follows:

Net present value Rate
Not more than £225,000 0%
More than £225,000 but not more than £2 million 1%
More than £2 million 2%

LTT is currently charged on the premium as follows:

Consideration Rate
Not more than £225,000 0%
More than £225,000 but not more than £250,000 1%
More than £250,000 but not more than £1 million 5%
More than £1 million 6%

Payment of LTT

The submission deadline for a land transaction return and payment of any LTT due is within 30 days of the effective date of the transaction.

If you need any advice on SDLT or LTT, please contact a member of our commercial property law team in confidence here or on 02920 829 100 for a free initial call to see how they can help.

To speak to one of our experts today, please contact us on 02920 829 100 or by using our Contact Us form for a free initial chat to see how we can help.

Contact Our Team
Catherine Burke
View Profile
Ciara O’Brien
Trainee Solicitor
View Profile
Donald Gray
View Profile
Elin Davies
View Profile
Elliw Jones
View Profile
Gareth Wedge
View Profile
Julia Bridge
Legal Director
View Profile
Lisa Evans
View Profile
Lorna Fraser
View Profile
Oliver Morris
Senior Associate
View Profile
Sarah Price
Senior Associate
View Profile
Stephanie Kendall
Trainee Solicitor
View Profile

I have worked with Darwin Gray for a number of years and the level of service, professionalism and timely response is second to none. I would highly recommend Darwin Gray to any business.”

Becs Beslee
Dice FM Ltd

Darwin Gray have provided us with a first-class service for many years now. They really take the time to understand our business and develop relationships which results in advice and support that is contextualised and effective.”

Rebecca Cooper
ACT Training

We have worked with Darwin Gray for several years and have always found their services and advice to be first class.”

Karen Gale
Stepping Stones Group

An extremely professional and sincere company who make time for your queries and understand the need to break down certain facts and information to ensure everything is understood perfectly. I would highly recommend the company to anyone looking for any type of legal advice”

Gwawr Booth
Portal Training Ltd

PSS has worked with Darwin Gray for many years. We have always received an excellent service. Prompt and professional advice and support.”

Ledia Shabani
Property Support Services UK Ltd

We have used several departments within DG recently and we have been very pleased with an effective, efficient and down to earth service. Very happy thus far and I expect that we will continue to use DG.”

Guto Bebb
Farmers’ Union of Wales

Darwin Gray offer us truly superb services. Very professional, quick and services available bilingually which is very important to us, highly recommend.”

Iwan Hywel
Mentrau Iaith Cymru

My “go to” in urgent and time sensitive cases for direction, support and advice. The team are quick to respond to calls or emails for advice and support on all matters. Always explain complex matters in a way a lay person can easily understand.”

Margot Adams
Guarding UK Ltd

Darwin Gray have acted for myself and my company over a number of years and at all times we have been treated with a professional manner yet maintain a common-sense approach at all levels. We couldn’t recommend them more highly.”

Simon Baston
Loft Co

We have been clients of Darwin Gray for many years; they’ve always dealt with all of our legal matters with such professionalism. They work around us, even during awkward hours, and we feel confident we can always rely on them.”

Louise Williams
ACT Training

Darwin Gray has been acting for Siltbuster for more than ten years. We would have no hesitation in recommending Darwin Gray to other organisations small or large.”

Richard D Coulton
Siltbuster Ltd

From the very first conversation, I had no doubt that Darwin Gray should be the firm to receive our instructions on this matter. I would have no hesitation in recommending Darwin Gray.”

Sandra Warr
Tomos TV

We regularly instruct Darwin Gray. Their service in dealing with our transactional matters and disputes is always professional, prompt and efficient.”

John Poppleton
Absolute Property Management Solutions Ltd

Darwin Gray guided me through a long and extended process that would have been much more difficult had it not been for their patience and constant support.”

Ifan Lewis

Excellent and efficient service. Great result achieved, highly professional and transparent on pricing. Would recommend.”

David Stevens

Superb legal service provided. Exceeded expectations. They went above and beyond in order to provide the best service possible.”

Huw Pickrell

Very professional and understanding. They were a calming influence in a very troubling situation and they brought it to a very successful conclusion”

Rachel Jones

We have used Darwin Gray and have been seriously impressed. The personal approach is what Darwin Gray are excelling on and is the reason why we will continue to work with them in the future.”

Cadwyn Housing Association