VAT and SDLT: lease variations

HMRC has published Revenue & Customs Brief 11/2020 explaining the appropriate VAT and SDLT treatment of the most common lease variations between landlords and tenants of commercial properties. Although there are no changes to either VAT or SDLT policy, HMRC notes that lease variations have become more frequent as a result of the coronavirus pandemic, for example where tenants are suffering a loss of income and need to vary the terms of their lease with their landlord. Common variations include changing the amount of rent paid by the tenant (including reduced rent periods and rent holidays) and lease extensions.