SDLT and periodic tenancies
Thanks to Julie Ford for this one as I hadn't given it any thought until now. With all tenancies becoming periodic, what happens to the SDLT liability as it's possible the total rent will exceed the threshold (£125k) over the course of the tenancy.
There's a short answer to this: for SDLT purposes a purely periodic contract is treated as a fixed term of 1 year (See Schedule 17A, Para 4(5)(b) Finance Act 2003 - link below). That means unless that 1 year incurs SDLT (the rent is at least £125k per annum) there is no issue at all. Quite neatly, it is impossible for an assured tenancy to incur SDLT over this time period because that would make the annual rent over £100k and so incapable of being an Assured Tenancy at all (see Schedule 1, Para 2(1) Housing Act 1988).
As for why they decided to cap periodic tenancies at one year... I have absolutely no idea!
