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ACCA Strategic Professional · Advanced Taxation (UK) · Stamp taxes (stamp duty, stamp duty reserve tax and stamp duty land tax)

Tarn plc takes a 10-year lease of commercial premises. It pays a premium of £200,000, and the net present value of the rent payable is £180,000. The SDLT on the rent element is charged at 0% on the NPV up to £150,000 and 1% on the excess. The premium is charged at the non-residential rates of 0% to £150,000, 2% from £150,001 to £250,000 and 5% above. What is the total SDLT payable?

The total SDLT is £1,300. The premium of £200,000 gives £1,000 (2% on the £50,000 above £150,000). The rent NPV of £180,000 gives £300 (1% on the £30,000 above £150,000). The two charges are added together.

  1. A£1,300Correct
  2. B£1,000
  3. C£2,800
  4. D£300

Explanation

Premium: 2% x (£200,000 - £150,000) = £1,000. Rent: 1% x (£180,000 - £150,000) = £300. The total is £1,300. £2,800 wrongly applies 1% to the whole £180,000 NPV.

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