Lease Rates and Bands
The amount of LBTT due when you enter into a non-residential lease depends on the amount of rent you pay under the lease and the amount of any other chargeable consideration, such as a lease premium.
Rent
If the amount of the rent is over the non-residential LBTT threshold you will pay LBTT on the rent.
Lease transaction rates and bands for transactions on or after 07 February 2020
|
NPV of rent payable |
Rate of tax to apply |
|---|---|
|
Up to £150,000 |
0% |
|
£150,001 to £2,000,000 |
1% |
|
Above £2,000,000 |
2% |
Lease transaction rates and bands for transactions prior to 07 February 2020
|
NPV of rent payable |
Rate of tax to apply |
|---|---|
|
Up to £150,000 |
0% |
|
Above £150,000 |
1% |
Lease Premiums
LBTT may also be payable on chargeable consideration other than rent included in the purchase price, such as a premium payment. In such cases, the standard tax rates and bands for non-residential property transactions apply.
Please note: If the ‘relevant rent’ (in other words the average rent) is at least £1,000 per annum, the nil rate tax band does not apply in relation to the premium. All such consideration will be taxed at the tax rate of the next tax band.
Transactions on or after 25 January 2019
|
Purchase Price |
LBTT rate |
|---|---|
|
Up to £150,000 |
0% |
|
£150,001 to £250,000 |
1% |
|
Above £250,000 |
5% |
Transactions prior to 25 January 2019
|
Purchase price |
LBTT rate |
|---|---|
|
Up to £150,000 |
0% |
|
£150,001 to £350,000 |
3% |
|
Above £350,000 |
4.5% |
Use the LBTT calculator to work out the amount of LBTT you need to pay on a lease transaction.
For more information view our technical guidance pages: