The effective date of a 10 year lease of a shop let for rent of £10,000 per annum is 1 November 2015. The net present value (NPV) is calculated using the £10,000 payable in each of the 10 years.
Whilst the NPV does not result in any liability to tax, the transaction is still notifiable, so a LBTT return was submitted by Tenant A.
On 1 August 2017, the lease was assigned to Tenant B. At the point the lease is assigned, the outgoing tenant, Tenant A, must complete a review return to reflect any changes that have been made to the lease since the original LBTT return was submitted. This review return must be submitted no later than 31 August 2017.
The obligation to file LBTT returns and pay any tax now passes to Tenant B. However, the review return made upon assignation does not affect the cycle in which three-yearly review returns are due. The date of the next three-year review return will be 1 November 2018, that being the day of the third anniversary of the effective date of the lease. Tenant B must make this review return no later than 1 December 2018.