AppId is over the quota
Dealing with commercial rent reviews can be a stressful time for both the landlord and the tenant, but unfortunately there is no escaping, as stress is a common bi-product to nearly all lease negotiations! If you are a Tenant and have recently experienced a rent increase under your rent review, you will be aware of the stresses of the process. Unfortunately though, the related stresses do not stop once the rent has been agreed.
As a commercial property solicitor with many years experience of providing advice and guidance to commercial tenants in England, I have witnessed the high stress levels created through not only difficult negotiations, but also the odd spanner in the works that can arrive from the most unexpected places. In this article I look at the wider implications of how a rent review could impact on your business.
Did you know you could also be liable for SDLT (Stamp Duty Land Tax) if your rent has increased?
If your commercial lease started after 1st December 2003 and the HMRC (Her Majesty's Revenue and Customs) considers the rent increase as abnormal, you may find that you need to file a return in the following circumstances: -
- If there is a rent review during the first five years of your lease and the annual rent has increased
- If there is a large increase (i.e. over 5%) in the rent after the first five years of the term
- If the rent is varied by a deed
- If you stay in the property at the end of the Term without formally renewing your Lease
It is essential that you remember that it is your responsibility to ensure that you comply with the Stamp Duty Land Tax obligations and failure to do so could result in a financial penalty. No doubt you'd agree that in these difficult economic times the last thing you'll want is an unexpected tax bill.
What can you do?
Well, first and foremost I would say "Don't panic". It is important to get professional advice at the start of the lease negotiating process. By doing so, you can avoid any pitfalls as well as enable you to carefully plan ahead. By getting professional guidance early on, it is possible to save you money in the long run and protect your business from unexpected bills either from your landlord (repairs) or indeed the tax office!
If you are concerned that your rent increase could attract Stamp Duty Land Tax liability, or even if you would like to discuss any aspect of your lease then DLH Solicitors Lancashire can help. Dominic Hester of DLH Solicitors is based in Clitheroe, Lancashire and provides commercial advice throughout England and Wales related to commercial property.
No comments:
Post a Comment