Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 section 25

Increase of rent treated as new lease

Section 25 of Schedule 6 explains how an increase in rent under a lease variation is treated as a new lease grant for Land Transaction Tax purposes, and sets out the exceptions to this rule.

• Where a lease is varied to increase the rent at any point before the end of the fifth year of the lease term, the variation is treated as if it were the grant of a new lease.
• The deemed new lease is treated as being granted in consideration of only the additional rent — that is, the increase over the original amount.
• This rule does not apply where the rent increase is made under a provision that already existed in the lease before the variation took place.
• The rule also does not apply to rent increases arising from certain provisions relating to agricultural leases, as specified elsewhere in the legislation.