Scotland · Non-residential leases
LBTT Lease Calculator
Work out LBTT on a Scottish commercial lease: tax on the net present value (NPV) of the rent, plus any premium, with a full band-by-band breakdown.
- NPV at the 3.5% statutory discount rate
- Rent bands checked: October 2026
- Three-yearly review returns explained
Calculate LBTT on a lease
Please enter an annual rent above £0 and a term of at least 1 year.
- Tax on rent (NPV)
- £2,658
- Tax on premium
- Total rent over term
- £500,000
Band-by-band breakdown (rent NPV)
| NPV band | Rate | Amount in band | Tax |
|---|---|---|---|
| Tax on rent | £2,658 | ||
NPV uses the 3.5% temporal discount rate in the LBTT (Scotland) Act 2013, Schedule 19. Rates checked: October 2026 · Source: Revenue Scotland — leases guidance
LBTT lease rent bands
| Net present value (NPV) of rent | Rate |
|---|---|
| Up to £150,000 | 0% |
| £150,001 – £2,000,000 | 1% |
| Above £2,000,000 | 2% |
The NPV adds up each year's rent discounted at 3.5% a year: rent ÷ 1.035year. A premium is taxed separately at the non-residential purchase rates — but if the rent is £1,000 a year or more, the 0% band is removed from the premium, so the premium starts at 1% instead. This calculator applies that rule automatically.
Worked lease example
A 10-year lease at £50,000 a year has an NPV of about £415,830. The tax on rent is 0% on the first £150,000 and 1% on the remaining £265,830 — £2,658. If you also paid a £100,000 premium, the premium tax would be £1,000 (1%, because the rent is £1,000 or more a year), making £3,658 in total.
Three-yearly review returns
Scotland is different from England here: the tenant must file an LBTT lease review return every three years, and again on assignation or termination. If the actual rent turns out higher than estimated, extra tax can become due. Budget for the admin as well as the tax.
What this calculator assumes
- The same rent is payable every year. Rent reviews, stepped rents and rent-free periods change the NPV.
- The lease is non-residential. Most residential leases are exempt from LBTT.
- Unknown or variable rent must be estimated for a real return, then corrected at review dates.
Lease FAQs
How is LBTT on a commercial lease calculated?
On the NPV of the rent over the term (discounted at 3.5%), plus tax on any premium. The NPV bands are 0% to £150,000, 1% to £2 million and 2% above that.
How is a lease premium taxed?
At non-residential purchase rates, but the 0% band is removed when the rent is £1,000 a year or more, so the premium starts at 1%.
Do I need review returns?
Yes — every three years, on assignation and on termination, so Revenue Scotland can recalculate the tax on actual rents.
Are residential leases taxed?
Most residential leases are exempt. This calculator is for commercial and other chargeable leases.