SDLT on a lease

[Anatol]

If I take out a 15 year lease, and pay SDLT on it, and then after 3 years break the lease and take out a new one for 999 years, can I offset the 12 years' worth I didn't get against the SDLT payable on the 999 year lease?

Or is there any other way to recover SDLT paid for on a lease but not enjoyed?

TIA

Tol

[soxboy]

No, you can't claim it back once it has been paid. You will pay for a 15 year term at the outset and if you decide to break the lease that's your loss.

I'm not sure how it would work in your case, but for clients who were looking at a 10 year lease with a 5 year break we are now suggesting looking at 5 year lease with option to renew for a further 5 years at the end of that period, that way you only pay SDLT for 5 years rather than 10.

[skwdenyer]

soxboy said:

No, you can't claim it back once it has been paid. You will pay for a 15 year term at the outset and if you decide to break the lease that's your loss.

I'm not sure how it would work in your case, but for clients who were looking at a 10 year lease with a 5 year break we are now suggesting looking at 5 year lease with option to renew for a further 5 years at the end of that period, that way you only pay SDLT for 5 years rather than 10.

The advice I received (4 years ago, in case it matters) from both my accountant and a my (highly-experienced) commercial property lawyer was that a break clause at 5 years would allow a SDLT return for the first 5 years to be filed at the outset, with a second SDLT return being required if the break is not exercised (and so on, repeated after each break is not exercised. Until the break is not exercised (if you see what I mean) then the lease is NOT for 10 (or 15 or whatever) years; it is for 5 years (or whenever the break occurs).

I am neither a lawyer nor an accountant; the above is the advice I received (and paid for, since that often makes a difference!).

[soxboy]

skwdenyer said:

soxboy said:

No, you can't claim it back once it has been paid. You will pay for a 15 year term at the outset and if you decide to break the lease that's your loss.

I'm not sure how it would work in your case, but for clients who were looking at a 10 year lease with a 5 year break we are now suggesting looking at 5 year lease with option to renew for a further 5 years at the end of that period, that way you only pay SDLT for 5 years rather than 10.

The advice I received (4 years ago, in case it matters) from both my accountant and a my (highly-experienced) commercial property lawyer was that a break clause at 5 years would allow a SDLT return for the first 5 years to be filed at the outset, with a second SDLT return being required if the break is not exercised (and so on, repeated after each break is not exercised. Until the break is not exercised (if you see what I mean) then the lease is NOT for 10 (or 15 or whatever) years; it is for 5 years (or whenever the break occurs).

I am neither a lawyer nor an accountant; the above is the advice I received (and paid for, since that often makes a difference!).

I think we may have both paid for the advice and got different answers!

[FUBAR]

soxboy said:

I think we may have both paid for the advice and got different answers!

Who'd have thunk it huh? (Appologies OP for taking it o/t)

I have a situation with an elderly long standing Rent Act tenant. Both my (experienced) property lawyer and the Council's lawyer are in agreement, while the tenant's know-it-all son has a mate at Grays Inn Chambers and has put it in front of Counsel (so he says anyway) and surprisingly enough they have a completely different opinion.

Luckily enough I have negotiated an agreeable middle ground, otherwise both sides would be shelling out cash to lawyers...again.