I have recently been told by a solicitor that there maybe "stamp duty" issues associated with the extension of a residential lease. Something related to a recent rule change.
I have a 99 year lease on my flat, with 69 years to run and I can extend it to 999 years for a 1 fee to the freeholder plus "costs" - which in the past has just meant that the leaseholder pays the legal fees.
Was this solicitor right in saying that stamp duty now needs also to be paid? He didn't seem sure.
There's a lease calculator on the Inland Revenue site
hth
Daytona
Daytona said
OK - thanks.
I assume that "rent" means ground rent? And premium? Is that the amount paid for the lease extension (1)?
I put in the figures I thought were right - 999 year lease, 20 a year ground rent and a premium of 1 and the premium stamp duty came out at
0.01, while the lease stamp duty was 0.00.Anyway, I take it from this that stamp duty is indeed payable on residential lease extensions - although it would seem that in my case it will be negligible.
Stamp Duty no longer exists in respect of land transactions and was replaced by Stamp Duty Land Tax on 1 December 2003.
The Stamp Duty Land Tax regime is "applicable" to every land transaction in respect of land in the UK. Broadly speaking, however, in order for there to be chargeable consideration for SDLT purposes, the Net Present Value (which is the total rent taking into a certain discount) must exceed 150K. SDLT is then charged at 1% in respect of rent for the amount exceeding 150K. In your case, you are nowhere near the threshold, hence no SDLT is payable.
DKCC
DKCC said
Thank you for the full reply - appreciated.
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