Businesses which rent their premises should remember that a lease granted for a term of more than seven years must be registered with the Land Registry.
And they are also being reminded that a Stamp Duty Land Tax (SDLT) return must be submitted to HMRC if they are to avoid heavy penalties
Our legal team here at Optimum are currently helping a client whose ten year lease wasn’t registered by the solicitor acting for her on the grant of the lease nor was a return made for SDLT, resulting in a penalty being imposed by HMRC.
If a lease is to run for seven or more years it has to be registered with the Land Registry. A Stamp Duty Land Tax return also has to be completed, even if no stamp duty is owing.
In the case of our client, she wasn’t liable to pay any stamp duty but she has been issued with a penalty of £400 from HMRC for not sending in a return. Had she been liable to tax as well, HMRC could well claim interest as well as the tax which is owing.
The issue came to light when the client went to sell her business and transfer the lease to the buyer. What should have been straightforward has become more complicated because when she opened the business and moved into the premises these two important requirements – registering with the Land Registry and completing the SDLT return – weren’t carried out.
For legal advice or help with any business lease issues, please get in touch with the legal team here at Optimum Professional Services.