Delay in Payment: Total Consideration Remains Chargeable Without Discount

SDLT on Deferred Land Payments

If part of the price for land is paid after completion, SDLT is still usually charged on the full agreed price. A delay in payment does not normally reduce the amount taxed, because SDLT is based on the total chargeable consideration agreed for the transaction, not on a discounted present-day value.

• Where the buyer agrees a fixed total price, that full amount is generally chargeable to SDLT even if some payments are made later.
• There is no SDLT discount simply because part of the consideration is deferred by instalments or to a later date.
• For example, if £300,000 is paid on completion and £50,000 is due 12 months later, SDLT is normally based on £350,000.
• The key issue is whether the later payment is fixed agreed consideration, rather than an amount that is uncertain, contingent, or dependent on future events.
• In more complex contracts, careful drafting matters because the SDLT treatment depends on the legal nature of the payment, not just on when the money is paid.

Scroll down for the full analysis.

SDLT and deferred payment: the full agreed price is still taxed

This page explains a simple but important SDLT rule. If part of the price for land is paid later, rather than on completion, that delay does not reduce the amount charged to SDLT. The tax is based on the total consideration agreed for the transaction, not on a discounted present-day value.

What this rule is about

In some land transactions, the buyer does not pay the whole price immediately. Part of the consideration may be payable by instalments, on a fixed later date, or after some other delay. The legal question is whether SDLT is charged on the full amount promised, or whether the future payments should be reduced to reflect the fact that they are paid later.

The rule dealt with here is narrow but clear: where consideration is simply delayed, the agreed total still counts in full.

What the official source says

The official material states that where some or all of the consideration is to be paid at a later date, the chargeable consideration is the total consideration agreed to be paid at any time. It also states that there is no discount for the delay in payment.

This reflects paragraph 3 of Schedule 4 to Finance Act 2003.

What this means in practice

If a buyer agrees to pay £X for land, SDLT is generally worked out by reference to that full £X, even if part of it is not due until later.

So, if the contract says:

• £300,000 is payable on completion, and
• £50,000 is payable 12 months later,

the starting point is that the chargeable consideration is £350,000, not £300,000 and not some lower discounted figure.

The practical consequence is that deferring payment does not usually reduce the SDLT bill. A buyer cannot argue that a later payment is worth less in today’s money and should therefore be taxed at a lower amount purely because of the delay.

How to analyse it

When looking at a transaction, ask these questions:

• What is the total consideration the buyer has agreed to pay for the land?
• Is any part of that amount merely payable later, rather than being uncertain or contingent?
• Does the contract fix a total amount, even though the payment dates are spread out?

If the amount is agreed and the only issue is timing, this rule points to the full amount being chargeable consideration.

It is important to distinguish delayed payment from other issues such as uncertain consideration, contingent consideration, or arrangements where the amount may change depending on future events. This source material does not deal with those situations. It deals only with delay in payment of consideration that has already been agreed.

Example

A buyer purchases commercial property for £500,000. Under the contract, £400,000 is paid on completion and £100,000 is payable 18 months later. For SDLT purposes, the chargeable consideration is £500,000. The later payment is not reduced to reflect the 18-month delay.

Why this can be difficult in practice

The basic rule is straightforward, but real transactions are not always. The main difficulty is identifying whether a later amount is simply deferred consideration, or whether it is something more fact-sensitive.

For example, a later payment may depend on future events, performance conditions, or valuation adjustments. In those cases, the issue may not be just delay in payment. The legal analysis may instead turn on different SDLT rules about the nature and amount of consideration. This source does not resolve those wider questions.

Another practical issue is drafting. A contract may spread payments over time in a way that looks commercially similar to finance, earn-out, or conditional pricing. The SDLT result depends on what the consideration legally is, not just when money changes hands.

Key takeaways

• If the price is agreed, SDLT is generally charged on the full amount, even if some of it is paid later.
• There is no reduction simply because payment is deferred.
• The key question is whether the later amount is fixed agreed consideration, rather than a different type of payment whose amount is uncertain or contingent.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Delay in Payment: Total Consideration Remains Chargeable Without Discount

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