The amount of tax chargeable on so much of the chargeable consideration as consists of rent is to be determined as follows.

• Step 1 Calculate the net present value (NPV) of the rent payable over the term of the lease (see paragraph 6).

• Step 2 For each tax band, multiply so much of the NPV as falls within the band by the tax rate for that band.

• Step 3 Calculate the sum of the amounts reached under Step 2. The result is the amount of tax chargeable in respect of rent.