Stamp duty land tax and Land Registry requirements for assignments of leases

Registering an Assignment of a Lease at the Land Registry


Post-completion formalities for assignments 

Once an assignment of a lease has been completed, there may be stamp duty land tax (SDLT) and Land Registry requirements to comply with.

Stamp duty land tax (SDLT)

SDLT is a tax on land transactions, including the assignment of leases. It is a self-assessment tax. The assignee must submit a Land Transaction Return and payment (if any tax is due) to HM Revenue & Customs (HMRC) within 30 days of the “effective date” of the transaction. Usually, but not always, the effective date is the date of completion of the assignment.

The HMRC website has guidance on SDLT liability for leasehold transactions and a useful SDLT calculator. See http://www.hmrc.gov.uk/sdlt/calculate/leasehold.htm. Currently a Land Transaction Return is only required where a premium of £40,000 or more is paid for the assignment and SDLT is only payable if the premium exceeds £150,000.

The SDLT rules are complex, with many exceptions, exemptions and reliefs. If your transaction is not straightforward you should take specialist tax advice to ensure that you pay the correct amount of SDLT.

Registration of leases at the Land Registry

An assignment of a registered lease must be registered at the Land Registry. So must an assignment of a lease that is not registered but whose term has more than 7 years left to run. If the assignment is not registered, it will not take effect as a “legal” assignment but only as an “equitable” assignment. This is less secure for the assignee and will make future dealings with the lease more complicated for all concerned.

An application to register an assignment of a registered lease is made on Land Registry form AP1. The transfer, a certified copy, and a fee must be submitted, together with evidence that any SDLT requirements have been met.

An application to register an assignment of a lease that is not registered but whose term has more than 7 years left to run is made on Land Registry form FR1. The transfer and the lease, plus certified copies of each, and a fee must be submitted, together with evidence that any SDLT requirements have been met and evidence of the landlord’s freehold title.

Further information about registering assignments can be found in Land Registry Practice Guide 25: https://www.gov.uk/government/publications/leases-when-to-register.

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