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Stamp duty

A letter of intent is not liable to stamp duty because it does not amount to a lease agreement.

A licence agreement that does not amount to a lease is also not liable to stamp duty.

Characteristics of a lease
Typically, a lease gives a person, the "lessee", the right to exclusive possession, allowing the person to occupy, use and otherwise enjoy of the property to the exclusion of all others for a fixed or determinable period of time. This is an interest in the property out of which sub-interests may be carved and assigned (subject to the terms and conditions of the lease). For example, the lessee's property rights can be sold or sublet if this is not specifically excluded by the terms of the lease.

Characteristics of a licence
Whilst there are several variations, a licence entitles a person, the "licensee", to enter and use the property for specific purposes authorised by the licence, but without conferring on the licensee either exclusive possession or any estate in the land. The entitlement is thus either gratuitous, or a personal right which is not generally transferable. For example, a lodger in a hotel has a personal contractual right to occupy the room for a fixed period in exchange for a fee, but has neither exclusive possession nor a property interest in the room itself. He is thus a licensee.

 
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Last Updated on 3 January 2011


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