The Stamp Duty Land Tax (Amendment of Schedule 5 to the Finance Act 2003) Regulations 2003

Explanatory Note

(This note is not part of the Regulations)

Part 4 of the Finance Act 2003 (c. 14) (“the 2003 Act”) introduces stamp duty land tax. The implementation date for the purposes of stamp duty land tax will be 1st December 2003 (see generally paragraph 2 of Schedule 19 to the 2003 Act).

These Regulations are made under section 112 of the 2003 Act which provides that the Treasury may by regulations amend Schedule 5 to that Act. Schedule 5 sets out how to calculate the stamp duty land tax chargeable in respect of a lease on which rent is to be paid.

Regulation 1 provides for citation and commencement.

Regulation 2 introduces the amendments to Schedule 5 to the 2003 Act which are set out in the Schedule.

Paragraph 1 of the Schedule substitutes sub-paragraphs (2) to (6) for sub-paragraphs (2) to (5) of paragraph 2 of Schedule 5 to the 2003 Act. The amendment changes the calculation of stamp duty land tax chargeable in respect of chargeable consideration consisting of rent so that, if the net present value of the rent payable over the term of the lease in question (“the NPV”) exceeds the relevant threshold set out in the Tables in sub-paragraph (3) of that paragraph, only so much of the NPV as exceeds the relevant threshold is chargeable to tax at 1%.

Paragraph 2 of the Schedule amends paragraph 9 of Schedule 5 to the 2003 Act so that consideration other than rent is charged at a minimum 1% not only where the annual rent payable exceeds £600 but also where the total value of the annual rents in relation to linked transactions exceeds that amount.