Stamp duty: valuing services and other non-cash payment
Market value and non-cash payment
When you pay for land with services, assets or another non-cash item, SDLT can use its open-market value.
- Value non-cash items at the effective date.
- Use evidence of what they would reasonably cost or fetch.
- Do not confuse asset market value with VAT on the land deal.
Scroll down for the full analysis.
Read the original guidance here:
Stamp duty: valuing services and other non-cash payment
If you give something other than money for land, stamp duty can still apply. Open-market value at the effective date decides. A favour, shares, goods or building work may all have a value.
What this rule is about
Most property purchases involve a cash price. Some do not. Instead, you may transfer another asset, assume a debt, or promise work for the seller as part of the bargain for the land. All can count.
For stamp duty land tax, known as SDLT, the amount you pay for the property can include money or something else of value. The law therefore needs a way to put a money figure on non-cash payment.
That figure is market value. It is not simply the number the buyer and seller choose to write down.
What the official source says
The legislation directs SDLT to the market-value rules used for Capital Gains Tax, so the relevant valuation follows that established framework rather than a figure privately agreed between the parties. That is the starting point. At its core, the test considers what the asset could reasonably fetch if it were sold on the open market, between parties dealing independently and on ordinary commercial terms. It is a hypothetical sale.
For non-cash payment, Schedule 4 requires its market value to be used at the effective date of the land deal, even if the item later becomes more or less valuable. That date matters. A later rise or fall in value does not change the starting question.
HMRC’s manual says the same approach applies where someone pays through services. It says to ask what those services would reasonably cost if bought on the open market. This is HMRC guidance, rather than the law itself.
- Start with everything you give to get the land, not only cash.
- Identify any asset, work or other non-cash item.
- Value that item at the effective date of the deal.
- Use an open-market figure, not a private bargain price alone.
- For services, ask what a customer would reasonably pay for them.
What this means in practice
You cannot safely treat a land deal as having no value just because no money changes hands. Nor can you assume that a low figure in the contract settles the point.
Take a simple swap. If you give an asset for a plot of land, the value of that asset may provide the figure needed for the SDLT calculation. The same idea applies if you earn the land by doing work.
VAT can confuse this issue. The legislation says VAT can form part of the amount paid in a land deal. Yet HMRC’s manual says that the market value of an asset itself excludes VAT, even where VAT applies to its transfer.
Those are different questions: one concerns VAT charged on the deal, while the other concerns the hypothetical open-market value of an asset.
- List every part of the bargain before completing the SDLT return.
- Keep quotes and invoices for work done instead of cash payment.
- Record why any figure reflects an open-market price.
- Separate VAT on the land deal from the value of the asset being assessed.
How to analyse it
Ask what really changed hands. The label used by the parties helps, but it does not answer the question by itself.
Then ask a more useful question: what would an independent person reasonably pay for the item or service in an open market? Comparable sales, professional quotes and ordinary commercial prices can all help.
- Check the sale contract, side letters and emails.
- Identify the land and the date the deal took effect.
- List cash, assets, debt and services separately.
- Decide which items are non-cash payment for the land.
- Find evidence of each item’s open-market value on that date.
- Consider a professional valuation if the figure is large or hard to support.
- Use the evidence to complete the land transaction return.
HMRC’s manual says you do not have to obtain a formal professional valuation. That does not remove the need for a sensible figure. If HMRC asks questions, you will need to explain how you reached it.
Example
Alex agrees to receive a small plot in return for renovation work. A local contractor would reasonably charge £40,000 for the same work at that time. On these facts, the services have a market value of £40,000 for this purpose.
Suppose Alex and the seller call the work a £10,000 favour in their agreement. That description does not automatically decide the value. The open-market cost of the work remains the important evidence.
The example does not work out the stamp duty due. That depends on the wider SDLT rules that apply to the particular land deal.
Why this can be difficult in practice
Some things have an obvious price. Others do not. A specialist service, a rare asset, or work done as part of a wider arrangement may have no neat price list.
This is where people often go wrong: they value only the cash paid, although the full bargain may also include an asset, service, debt assumption, or other valuable consideration that never reached a bank account. The task is broader.
HMRC says the figure on a land transaction return may be checked through an enquiry. Good records do not guarantee agreement, but they make it easier to show why your figure was reasonable.
- A private discount may not show the open-market value.
- Free work can still have a value when given for land.
- A later invoice may not reflect the value on the effective date.
- VAT needs separate thought rather than a quick assumption.
- An unusual asset may need stronger evidence than a standard service.
Key takeaways
- Non-cash payment for land can count for SDLT.
- Use the open-market value at the effective date.
- Keep evidence that supports the figure you report.
Technical analysis
For advisers, and for anyone who wants to check the law behind this page. You do not need this section to understand the guidance above.
Legislation
- FA 2003 section 118 — imports the capital gains market value definition
- FA 2003 section 272 — open-market price definition for any asset (provision not found on legislation.gov.uk)
- FA 2003 Schedule 4 para 1 — what counts as the amount paid for land
- FA 2003 Schedule 4 para 2 — when VAT forms part of the amount paid
- FA 2003 Schedule 4 para 7 — valuing non-cash payment at the effective date
Official guidance
The pages below are HMRC’s guidance. Guidance is not law. It sets out how HMRC reads the legislation, and it is not binding on you, on a tribunal or on a court. Where guidance and the legislation differ, the legislation wins. HMRC can also change or withdraw guidance, and it may not cover your facts.
Where this is not settled
- Working out the open-market value of unusual assets or services can depend heavily on the evidence available.
- The right answer may be disputed where there is no clear comparable sale or market price.
Evidence you would need
This kind of case is decided on the facts of the individual property. These are the records that usually settle it, and the ones an adviser would ask you for.
- The contract and any side agreements
- A clear description of every cash and non-cash item given
- Quotes, invoices or comparable prices for services
- Valuation evidence where the non-cash item has no obvious market price
- The effective date of the land deal
Explore this with an AI
Readers often want to test their own situation. Copy the prompt below into ChatGPT, Claude or Gemini. It hands the model the actual legislation for this page rather than letting it answer from memory, and tells it to be explicit about what is uncertain. What comes back is information, not advice – check it against the links above.
I am researching UK Stamp Duty Land Tax (SDLT), which applies in England and Northern Ireland. MY QUESTION Stamp duty: valuing services and other non-cash payment [Replace this with your own situation: what you are buying, the price, the dates, who the buyer is, and what you plan to do with the property.] THE LAW THIS TURNS ON - FA 2003 section 118 - imports the capital gains market value definition https://www.legislation.gov.uk/ukpga/2003/14/section/118/2025-11-17 - FA 2003 section 272 - open-market price definition for any asset https://www.legislation.gov.uk/ukpga/2003/14/section/272/2025-11-17 - FA 2003 Schedule 4 para 1 - what counts as the amount paid for land https://www.legislation.gov.uk/ukpga/2003/14/schedule/4/paragraph/1/2025-11-17 - FA 2003 Schedule 4 para 2 - when VAT forms part of the amount paid https://www.legislation.gov.uk/ukpga/2003/14/schedule/4/paragraph/2/2025-11-17 - FA 2003 Schedule 4 para 7 - valuing non-cash payment at the effective date https://www.legislation.gov.uk/ukpga/2003/14/schedule/4/paragraph/7/2025-11-17 Guidance page from HMRC on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm04140 HOW I WANT YOU TO ANSWER 1. Work from the legislation above. Read it before answering. Guidance from HMRC is its view of the law, not the law, and does not bind a tribunal or a court. 2. Tell me what the rule actually requires, in plain English. 3. Tell me which facts decide the answer, and which facts would change it. 4. Tell me what evidence I would need to support the position. 5. Be explicit about anything unsettled or fact-sensitive. Do not guess. 6. Your training data has a cutoff and SDLT rates and reliefs change at fiscal events. Say so if you are not sure the law is current. POINTS ALREADY KNOWN TO BE UNCERTAIN ON THIS TOPIC - Working out the open-market value of unusual assets or services can depend heavily on the evidence available. - The right answer may be disputed where there is no clear comparable sale or market price. Do not give me a conclusion you cannot support from the provisions above.
Legislation links show Finance Act 2003 as it stood on 2025-11-17. The law may have changed since, and the rules that apply are those in force on the date of your transaction. The official guidance this page is based on is here.
This page was last updated on 31 August 2026
Useful article? You may find it helpful to read the original guidance here: Stamp duty: valuing services and other non-cash payment
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