Situation 10
Commercial property
Non-residential transactions use different rates, and leases are charged in a way that catches people out, on the rent as well as on any premium.
The short answer
Commercial stamp duty is less about reliefs and more about getting the computation right, particularly on leases, where the charge on rent is calculated on a basis that is easy to get wrong and easy to overlook entirely.
Where this usually goes wrong
These are the patterns we see most often. Each one is a situation where the obvious answer and the correct answer are different.
Forgetting the charge on rent
A lease can produce a charge on the rent as well as on any premium, and the rent calculation is not intuitive.
Assignments, variations and extensions
Each is treated differently and each can trigger its own charge.
Options, break clauses and terms
The length taken into account is not always the length people assume.
VAT on the consideration
Where VAT is chargeable, it can form part of the consideration for stamp duty.
Assuming commercial means simple
The rates are lower. The computation is frequently harder.
The facts that decide it
If you want to know where you stand before you speak to anyone, these are the questions we will ask. Having the answers ready is most of the work.
- 01Is this a freehold purchase, a new lease, or a dealing with an existing lease?Each is computed on a different basis, so this sets the whole approach.
- 02What is the premium, and what is the rent?Both can carry a charge, and both are taken from the documents rather than the headline figure.
- 03What is the term, and are there options or break clauses?The term taken into account drives the computation, so the drafting has to be read closely.
- 04Is VAT chargeable on the consideration?Whether VAT is in point affects the figure the computation is run on.
- 05Is any part of the property residential?A residential element changes which analysis the transaction falls into.
- 06Are there linked transactions?Transactions treated as one are worked through together rather than separately.
- 07Who is the purchaser or tenant, and are the parties connected?Connection between the parties can change how the consideration is established.
- 08What is the effective date?This fixes the moment at which the facts are tested and the return is measured.
What we would want to see
The analysis is only as good as the documents behind it. For this situation, that normally means:
- The lease or agreement for lease
- The rent schedule and any review provisions
- Completion statement, where available
- Details of every property interest held
- Evidence of any disposal and its date
- Details of all purchasers and their positions
- Any existing SDLT return and UTRN
- Correspondence with the conveyancer on the point
Questions we get on this
The transaction is commercial. Does that make it simpler?
Not on its own. A lease in particular has more moving parts than a straightforward purchase, and the parts that are easiest to overlook are the ones that carry the charge. Simpler rates and a simpler computation are not the same thing.
We are taking a lease rather than buying. Is there anything to file?
That is one of the things we establish rather than assume. A lease is a transaction in its own right, and what is chargeable on it is worked out from the lease documents, the term and the rent, not from the fact that no purchase price is changing hands.
There is a flat above the shop. Does that change anything?
It can. Where part of what is being acquired is residential, the analysis is not the same as for a wholly non-residential transaction. What matters is what the title actually includes and what each part was being used for, which is a question of fact and evidence.
Will you just tell me what I want to hear?
No. Our fee is fixed and does not depend on the outcome, which means we have no interest in finding a saving that is not there. If the original return was right, we will tell you that in writing, and you will have a reasoned position on file if it is ever looked at.
This page is general information only and is not advice. It applies to transactions in England and Northern Ireland. Reviewed 16 August 2026.