Stamp Duty Land Tax Manual

SDLTM13190 - Calculation of Stamp Duty Land Tax (SDLT): Rent: Variable or uncertain rent: Index linking

Variations in index linked rents where the whole of the change in the amount of rent payable is solely because of adjustments to the rent in line with the retail prices index (RPI) are ignored. In these cases the rent is not treated as variable. This includes any capped RPI adjustments that are subject to a minimum or maximum restriction. However, the definition of excluded adjustments (at FA03/SCH17A/PARA7(5)) does not include:

• 바카라 사이트˜RPI plus바카라 사이트™ or 바카라 사이트˜RPI minus바카라 사이트™ adjustments. A rent adjustment that is RPI plus X% must be taken into account when calculating the net present value. The whole of the adjustment cannot be said to be in line with RPI (as it is X% more than RPI) and so does not come within definition.
• rent adjustments in line with another index (for example, RPIX). The legislation specifically refers to the 바카라 사이트˜retail prices index바카라 사이트™ and not to any other index.

HM Revenue and Customs will accept that rent adjustments which are RPI based up to three months before the adjustment are 바카라 사이트˜in line with바카라 사이트™ RPI. Thus where the rent in June is to be adjusted by reference to the figure of RPI in the previous March, this is allowable.

It is possible to word leases so that adjustments to the rent only occur if RPI is positive, thus creating 바카라 사이트˜increase-only바카라 사이트™ rent adjustments. Such rent adjustments are in line with RPI and will, therefore, be ignored for the purposes of SDLT.