Does our tenant have to pay CGT after 10 years?

If the post means SDLT then it's nothing new, it's been around for years.

I expect that tenants have become more vulnerable as rents have risen so steeply, so it will be quicker to get caught. Some houses I used to do for £500-600 pcm are now doing nearly £1,000 pcm.

The obligation is on the tenant to pay so many will not realise they have to.

In terms of HMRC, they will know which landlords have been letting property long term from tax returns; if they enquire as to tenant changes then landlords will be legally obliged to provide the relevant information.

There is a calculator on the HMRC website which tenants can use to work out what is due.

I've yet to see anybody have to pay this, but as I say it might become more widespread as rent rise.

This will work wonders, from the HMRC perspective, when inheritable tenancies become the norm.

"SDLT is calculated across the total time a Tenant takes a tenancy for, up to a maximum of seven years."
Not many, outside London, will reach the £125k threshold over that period.

confused on this SDLT topic, i first checked the date as we are in April, but it was posted on 7 th so assume not an April Fool.is £125,000 gross rent paid or received by landlord with or without agent fees being paid.
if on cumulative rent paid, can the long term tenant offset any costs they might have spent on the property (ie redecorate, replace a carpet) or repair any accidental damage? if one had a tenant say on a 3 year tenancy renting a large expensive property on a monthly rental of say £5000 p mth who has the responsibility to advise the tenant.
where is there capital gain? what have they sold? is there any annual exemption the tenant can claim? if joint tenancy can both claim £125,000 and annual exemptions? if you are a RENT 2 RENT property investor and had a 5 or 10 year agreement you might well reach this £125,000 paid to owner. even more confused now!!!

I’m not a tax expert but isn’t CGT paid on assets that have a gain. The tenant doesn’t own the asset so this sounds like total nonsense to me.

The basis for assessment is simply rent and/or premium with no offset (like buying a house when only the purchase price is relevant).

The Gov website has the details:

https://www.gov.uk/guidance/stamp-duty-land-tax-leasehold-purchases

Reply to the comment left by Jonathan Cocks at 12/04/2022 - 13:17
Hi Jonathan,
i raised this query at first under the wrong tax type! I said CGT but it is actually a tax that tenants must pay under SDLT regulations.
It is for tenants to pay SDLT1 of 1% of cumulative rent paid in excess of £125,000.
I cannot find any legal mention of a 3% allowance nor any duration for AST duration.
Cumulative seems to be from the start of a rental agreement. A new AS that can be considered "similar" becomes linked as does rolling (probably same as Section 8 21 links all AST's together)
When this tax actually becomes due is also vague. Is it annually or just when selling the property still tenanted?

Sadly Property 118 has not managed to solve or even explain this one.

I have never known a tenant under an AST to notify the HMRC that their rental payments for their property have exceeded the £125k threshold nor have I ever heard of the HMRC trying to check or enforce this. If the HMRC were to consider doing something like this i would think that they would start by looking at all those commercial leases that have either had rent reviews or become periodic to claim more tax rather than go after tenants under AST's so i don't think this should be a realistic concern of your tenants.

If you really are worried, you could grant your tenant a new AST but it would need to be on different terms to be classed as a new tenancy (and whether the altered terms are sufficient to amount to a new tenancy is difficult to say but) maybe add a rent review each year in accordance with the ONS stats. I couldn't guarantee, but would think this is sufficient to create a new tenancy and might be acceptable to the tenant on the basis that they don't have to pay the SDLT (Which I would think would be nominal in any case). Hope this helps