Stamp duty where the final property price is not yet known
When the final price is unclear
SDLT can apply to future payments as well as the money paid on completion.
- Assume a conditional payment will become due.
- Make a reasonable estimate where the amount is not yet known.
- Revisit the position when the uncertainty ends.
Scroll down for the full analysis.
Read the original guidance here:
Stamp duty where the final property price is not yet known
You cannot simply leave out a future part of the price when you work out stamp duty land tax, because if it depends on an event, you normally assume it will be paid. Estimate unknown amounts reasonably.
What this rule is about
Some property deals have more than one price. You may pay a fixed sum now, then pay more if planners grant permission or if a business reaches a profit target.
A deal can leave the final price unclear on completion day, but you must work out SDLT then, so the law distinguishes two types of uncertainty. That distinction matters.
What the official source says
The Finance Act 2003, section 51, applies. HMRC’s manual explains the rule. The manual is HMRC guidance, not the law, but it reflects the statutory starting point.
- Assume uncertain-event payments will be made.
- This applies where the payment would be due only if an event happens.
- It also applies where a payment would stop only if an event happens.
- When the amount is uncertain or unworked out, make a reasonable estimate.
- HMRC cites unprepared profit accounts needing estimates.
- Make the estimate at the transaction’s effective date, which is usually completion.
What this means in practice
The amount you pay for the property can include more than the cash handed over on completion. Even unpaid top-ups affect SDLT from the start.
“Only payable if” still counts now.
- Read the price clause, including any earn-out or overage clause.
- Separate an amount triggered by an event from an amount that merely cannot yet be calculated.
- Keep the figures and assumptions behind any estimate.
- Review the SDLT position when decision-makers decide the event or determine the final amount.
How to analyse it
Start with what the contract says you are giving for the land, then ask whether the future amount is conditional, unknown in size at the effective date, or both. The answer directs your treatment.
- Which payment does the contract fix on completion?
- Is there an extra payment linked to a future event?
- If so, what event triggers it or stops it?
- Can the amount be calculated on the effective date?
- If not, what estimate is reasonable using information then available?
- Could later accounts, a valuation or a planning decision change the result?
Example
Amir agrees to buy land for £300,000, plus £50,000 if planners grant planning permission. The extra £50,000 is contingent: it depends on a future event. For the initial SDLT calculation, he must include it on the assumption that it will be paid. The starting figure is therefore £350,000, before applying the SDLT rules that apply to his deal.
Amir estimates payment from next year’s profits. The accounts do not yet exist. He must make a reasonable estimate of that amount at the effective date.
Why this can be difficult in practice
The labels in a contract do not settle the point. Calling a payment a bonus, adjustment or retention does not show whether it forms part of the price for the land.
A reasonable estimate is also not a guess. It should have a clear basis in facts available at the time.
- A payment may look optional but be required if stated conditions are met.
- One clause can contain both a contingency and an amount that needs estimating.
- Later information may mean too much or too little SDLT was paid initially.
- Section 80 provides for the SDLT position to be reconsidered when the uncertainty ends.
- Section 90 may allow an application to defer payment in limited cases involving later payments.
- Deferral is not an automatic right and does not postpone tax on amounts already paid or known.
Key takeaways
- Include a contingent future payment as though it will be paid.
- Estimate an unknown amount reasonably at the effective date.
- Keep evidence because later facts can change the SDLT result.
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 Schedule 4 para 1 — what counts as the amount paid for land
- FA 2003 section 51 — contingent, uncertain and unascertained amounts paid
- FA 2003 section 80 — adjustments when a price later becomes known
- FA 2003 section 90 — applying to defer tax on later payments
- FA 2003 section 119 — the date used for SDLT purposes
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
- What is a reasonable estimate will depend on the contract, available evidence and facts known on the effective date.
- The supplied material does not set out the regulations governing the form, timing and outcome of a deferment application.
- The bundled legislation is verified only for changes in force up to 17 November 2025.
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 signed contract and every clause dealing with extra payments
- A timeline of completion, payment and decision dates
- Accounts, forecasts or valuations used to estimate the final price
- Evidence showing whether a stated event has occurred or cannot occur
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 where the final property price is not yet known [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 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 section 51 - contingent, uncertain and unascertained amounts paid https://www.legislation.gov.uk/ukpga/2003/14/section/51/2025-11-17 - FA 2003 section 80 - adjustments when a price later becomes known https://www.legislation.gov.uk/ukpga/2003/14/section/80/2025-11-17 - FA 2003 section 90 - applying to defer tax on later payments https://www.legislation.gov.uk/ukpga/2003/14/section/90/2025-11-17 - FA 2003 section 119 - the date used for SDLT purposes https://www.legislation.gov.uk/ukpga/2003/14/section/119/2025-11-17 Guidance page from HMRC on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm05010 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 - What is a reasonable estimate will depend on the contract, available evidence and facts known on the effective date. - The supplied material does not set out the regulations governing the form, timing and outcome of a deferment application. - The bundled legislation is verified only for changes in force up to 17 November 2025. 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 where the final property price is not yet known
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