»Ê¹ÚÌåÓýapp

A non-residential agreement for lease is exchanged on 1 January 2015 and is substantially performed on 1 February 2015. »Ê¹ÚÌåÓýapp term of the lease is 10 years from the date that the lease is to be granted (which is not known). »Ê¹ÚÌåÓýappre is a rent review to market rent at the end of the fifth year. »Ê¹ÚÌåÓýapp lease is subsequently granted on 1 May 2015.

At time of substantial performance, the agreement for lease is for an indefinite term so the lease is treated as being a notional lease for a term of one year. SDLT is payable to the extent the NPV exceeds the threshold. If SDLT is payable, the lease is notifiable as a notional lease for a term of one year (1 February 2015 to 31 January 2016) no later than 2 March 2015 (30 days after substantial performance).

»Ê¹ÚÌåÓýapp grant of the actual lease on 1 May 2015 will be a linked transaction to the notional lease created on substantial performance. Notification is required because the single lease created by the combination of the notional and actual lease now has a certain term, so SDLT will be due on the rent not already taken into account at notification of substantial performance.

Overlap relief is not a claimed relief and is not obtained by answering yes to Question 9 on a land transaction return. In this case it would be obtained by reporting only the rent payable in the first year of the lease for the period from 1 February 2016 to 30 April 2016. That is the part of the first year of the term of the lease that is not common to the notional lease. »Ê¹ÚÌåÓýapp rent payable in year 1 for the purpose of the NPV calculation is £51,205 (£210,000 x 89/365). »Ê¹ÚÌåÓýapp rent for the remainder of the term for the purpose of the NPV calculation is taken as £210,000.