LBTT6029 - Extension of lease or increase of rent of lease

LBTT guidance when a previously non-notifiable lease transaction becomes notifiable upon the extension of a lease term or an increase in the rent.

Where a lease is varied to extend its term or increase the rent payable, and the effect is that the lease (had it originally been granted for the increased rent/term) would have been notifiable to us when it was not previously notifiable, the tenant must submit an LBTT return within 30 days of the day after the date from which the variation takes effect (known as the ‘relevant date’– note: this is also the ‘relevant date’ for the purposes of the LBTT return). The date the return is required to be made by is the filing date (see LBTT1000).

The LBTT return must include an assessment of the amount of tax chargeable at the review date, calculated using the tax rates and bands that were in force at the effective date of the lease.

Any tax due must be paid at the same time as the LBTT return is made.

Guidance on How to make an LBTT return and pay tax is available separately on our website.

Once the LBTT return has been made, subject to certain restrictions it can be amended up to 12 months after the filing date - see LBTT4006.

LBTT(S)A 2013 schedule 19 paragraph 30

A tenant who fails to make a LBTT return to us by the filing date is liable to a penalty (see RSTP3005). If the return contains an inaccuracy, the tenant may also be liable to a penalty (see RSTP3011).

A tenant who fails to pay tax prior to the expiry of 30 days after the date payment is due (the day the LBTT return is made) is liable to a penalty (see RSTP3008). Interest will be charged however on the amount of any unpaid tax from the filing date until the date it is paid (see RSTP4002).

A tenant required to make a LBTT return to us, or who is the tenant in a land transaction which is not notifiable, is also required to keep and preserve certain records. See LBTT9001 for further guidance.

Ref ID: 
LBTT6029
Archive Date: 
9 March 2015
Last updated: 
9 March 2015
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