LBTT6008 - What is not chargeable consideration

LBTT guidance on payments and other types of consideration which are not treated as chargeable consideration in relation to a land transaction involving a lease.

None of the following is treated as a chargeable consideration and is not, therefore, subject to LBTT:

1) When a lease is granted:

  • any undertaking by the tenant to repair, maintain or insure the leased premises;
  • any undertaking by the tenant to pay for services, repairs, maintenance, insurance or the landlord’s costs of management;
  • any other obligation by the tenant that would not affect the rent that a tenant would pay in the open market;
  • any guarantee of the payment of rent or the performance of any other obligation under the lease;
  • any penal rent or increased rent in the nature of penal rent, payable as a result of a breach of an obligation of the tenant under the lease;
  • any other obligation of the tenant to bear the landlord’s reasonable costs or expenses of, or incidental, to the grant of a lease;
  • any obligation under the lease to transfer to the landlord on termination of the lease payment entitlements granted to the tenant under the single payment scheme (the scheme of income support for farmers under Title III of Council Regulation (EC) No 73/2009) in relation to land subject to the lease;
  • a payment made in discharge of any of the obligations in this list; or
  • in relation to the renunciation of a lease, the release of any of the obligations in this list.

LBTT(S)A 2013 schedule 19 paragraph 15

2) Where a lease is assigned, the assumption by the assignee of the obligation to pay the rent or any other undertaking by the tenant under the lease is not treated as chargeable consideration.

LBTT(S)A 2013 schedule 19 paragraph 16

3) Any reverse premium paid:

  • by the landlord to the tenant where a lease is granted;
  • by the assignor to the assignee when a lease is assigned; or
  • by the tenant to the landlord when a lease is renounced.

LBTT(S)A 2013 schedule 19 paragraph 14

4) Where a lease is granted in consideration of the renunciation of an existing lease between the same parties, the grant of the new lease does not count as chargeable consideration for the renunciation and the renunciation does not count as chargeable consideration for the grant of the new lease.

LBTT(S)A 2013 schedule 19 paragraph 18

Archive Date: 
1 February 2017
Last updated: 
21 May 2015

Archive

Updated date: 2015-05-21 10:40
Version ID: 714
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