Guidelines for Deferred Stamp Duty Payments on Works and Services Consideration

SDLT deferral where the price includes works or services

Special SDLT timing rules apply where part of the price for land is not cash but works or services provided by the buyer. If the value is uncertain or depends on what is done over time, SDLT can be paid later under an agreed timetable based on the value of the works or services actually completed.

• If the works or services are expected to finish within six months, SDLT on that part is due within 30 days after completion.
• If they are expected to take more than six months, the buyer must propose staged payment dates at intervals of at least six months, plus a final payment 30 days after completion.
• Each payment is calculated by reference to the value of the works or services carried out by that stage, so good records and a sensible valuation method are important.
• HMRC may agree to vary the payment schedule near the end of the project to avoid an unnecessary interim payment shortly before completion.
• From 1 March 2019, if the transaction only becomes notifiable when the works or services are completed, the SDLT return and any tax due must be submitted within 14 days after completion.

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SDLT deferral where the price is works or services

This page explains a narrow but important SDLT timing rule. It applies where part of the consideration for a land transaction is not cash, but the buyer agrees to carry out works or provide services. In those cases, there are special rules for when SDLT on that part of the consideration must be paid, especially if the value is contingent or uncertain at the outset.

What this rule is about

SDLT is usually paid by reference to the chargeable consideration for the transaction. Most often, that means money. But sometimes the buyer gives non-cash consideration instead, such as building works, repair works, or services.

Where the consideration consists of carrying out works or providing services, the amount may not be fixed on the effective date of the transaction. The work may be done over time, and its value may only become clear as it is performed. The legislation therefore allows payment to be deferred, but only under a structured timetable.

This rule is about the procedure for paying SDLT on that kind of non-cash, deferred, contingent, or uncertain consideration.

What the official source says

HMRC says there are special rules where deferred consideration consists of:

• the carrying out of works, under Finance Act 2003 Schedule 4 paragraph 10, or
• the provision of services, under Finance Act 2003 Schedule 4 paragraph 11.

If the works or services are expected to take less than six months to complete, the SDLT on that part of the consideration must be paid no later than 30 days after completion of the works or services.

If they are expected to take longer than six months, the application for deferral must set out payment dates at intervals of at least six months. There must also be a final payment due 30 days after the works or services are completed.

Each payment is based on the value of the works or services carried out at that stage.

HMRC also says the purchaser may ask for the payment schedule to be varied near the end of the works or services. This is intended to avoid an unnecessary interim payment shortly before completion. The application must be made in writing to the Stamp Office and should quote the full reference.

The manual adds an important timing point for later notifiability. From 1 March 2019, if the transaction becomes notifiable for the first time at that stage, the SDLT return and any tax due must be submitted within 14 days after the works or services are complete.

What this means in practice

The practical point is that HMRC does not expect SDLT on this type of consideration to be guessed in full at the start and left uncorrected. Instead, the tax is paid by reference to the value of what has actually been done, following an agreed timetable.

There are two broad cases:

• If the works or services should finish within six months, there is effectively a single deferred payment point: 30 days after completion.
• If they are expected to run for longer, the buyer must propose staged payments, at intervals of no less than six months, with a final balancing payment 30 days after completion.

This matters for conveyancers and taxpayers because the SDLT position is tied to the progress and valuation of the works or services, not just to the land transfer date.

It also means that record-keeping is important. To calculate the tax correctly at each stage, the purchaser needs a sensible basis for valuing what has actually been provided by that point.

How to analyse it

A sensible way to approach this issue is to ask the following questions:

• Is any part of the consideration for the land transaction made up of works or services rather than money?
• Does that non-cash consideration fall within the legislative rules on works or services referred to by HMRC?
• Is the value contingent or uncertain so that deferral is relevant?
• How long are the works or services expected to take: less than six months, or longer?
• If longer than six months, what payment timetable should be proposed, making sure intervals are not less than six months?
• What is the value of the works or services completed at each payment stage?
• Is the project close enough to completion that it would make sense to ask HMRC to vary the schedule?
• Could the transaction become notifiable for the first time only when the works or services are completed, triggering the 14-day filing and payment rule mentioned by HMRC for cases from 1 March 2019?

The key is to separate two issues:

• what counts as chargeable consideration under the legislation, and
• when the SDLT on that consideration must be paid under the deferral procedure.

The HMRC page deals mainly with the second issue.

Example

Illustration: A buyer acquires land and, instead of paying part of the price in cash, agrees to carry out construction works for the seller. The works are expected to last 14 months.

Because the works are expected to take more than six months, the buyer cannot simply wait until the very end and pay once. The deferral application should include staged payment dates at intervals of at least six months, with SDLT calculated by reference to the value of the works completed at each stage. There must also be a final payment due 30 days after the works are completed.

If, near the end, a six-monthly payment date falls only a few days before completion, the buyer may ask HMRC to vary the schedule so that one final payment is made 30 days after completion instead of making two payments very close together.

Why this can be difficult in practice

The main difficulty is valuation. The rule says payment is based on the value of the works or services carried out at each stage, but the manual page does not set out a detailed valuation methodology. In practice, that can raise questions where the work is partly completed, subject to snagging, or difficult to price in a straightforward way.

Another difficulty is timing. The procedure depends on what is expected at the outset. If the expected duration changes, the payment timetable may no longer fit the commercial reality. HMRC recognises this to some extent by allowing the purchaser to apply for a variation near the end of the project.

There is also a technical distinction between a transaction that is already notifiable and one that becomes notifiable for the first time only later. The manual flags a special 14-day deadline from 1 March 2019 for that latter situation. Readers need to be careful not to assume that every case follows the same filing timetable.

Finally, this is an area where the underlying legislation on what counts as consideration in the form of works or services is important. Not every obligation connected with a land deal will necessarily be treated in the same way. The HMRC page assumes that the transaction already falls within those legislative provisions.

Key takeaways

• Where land consideration consists of works or services, SDLT may be paid on a deferred basis under special rules.
• If completion of the works or services is expected within six months, payment is due within 30 days after completion; if longer, staged payments at intervals of at least six months are required, with a final payment 30 days after completion.
• The tax is based on the value of works or services actually carried out at each stage, and HMRC may vary the schedule near the end to avoid unnecessary short-interval payments.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Guidelines for Deferred Stamp Duty Payments on Works and Services Consideration

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