Where whole or part of the chargeable consideration for the transaction is rent under Parts 4 or 5, the leases schedule takes effect (Schedule 19) with the following modifications.
Transactions include:
- partnerships entering into a lease as tenant
- a partnership granting a lease to a partner
The chargeable consideration is reduced to take account of the partnership shares and interests of the partners involved in the lease if they had an interest prior to the lease agreement.
Chargeable consideration involving rent
LBTT is charged on:
- a proportion of the Net Present Value (NPV) of the rent; and
- a proportion of any consideration other than rent and market value of the lease.
The NPV of the rent over the term of the lease is determined as usual. The relevant chargeable proportion, is determined as:
(100 – SLP)%
SLP = sum of the lower proportions.
Chargeable consideration other than rent i.e. a premium
Where there is consideration other than rent i.e. a premium, the chargeable consideration is determined in the same way as any other chargeable interest in land.
MV x (100-SLP)% in the case of a lease this is taken to be the capital value of the lease.
MV = market value, SLP = Sum of Lower Proportions.
Transfer of a lease from a partnership where both parties are bodies corporate
For transfers between a body corporate partnership and another body corporate that is or has been a partner where:
- the calculated SLP = 75 or more
The chargeable consideration is then taken as the market value of the interest.
For further guidance see: