The Government have stated that their intention behind the abnormal rent increase regime is to prevent the parties from at least agreeing to a low or minimal rent for the first five years with an abnormal increase in year six, thereby reducing the SDLT charge over the long term. However, many in the industry consider that the rules are highly unlikely to counter abuse because, commercially, a landlord would not forgo the rent in the first five years of a lease to provide an SDLT advantage for a tenant, especially as the direct tax rules would mean that the landlord suffered tax on the rents forgone.

In their impact note for the measure, the Government state that 9,000 businesses a year will benefit from the reduction in administrative form-filling. It would be useful to know how HMRC has arrived at that figure and what the breakdown is of the number of businesses that will benefit from the change to leases held over, compared with the number of businesses that will benefit from the changes to agreements for leases.

HMRC also estimates that 13,000 businesses will benefit from the change by not having to carry out the complex calculations needed to determine whether their rent increase is abnormal. Again, it would be helpful to understand the basis of that estimate. As the provisions are being repealed, what assurance can the Minister give that the avoidance that was originally targeted by these measures no longer presents a problem or risk for HMRC?