Stamp duty where part of the price depends on a future event
Future payments and stamp duty
A possible later payment may still form part of the initial SDLT calculation where it depends on an uncertain future event.
- Check the contract terms
- Identify the uncertain event
- Apply the statutory assumption
Scroll down for the full analysis.
Read the original guidance here:
Stamp duty where part of the price depends on a future event
Stamp duty where part of the price depends on a future event
If part of what you pay for a property depends on what happens later, do not assume stamp duty ignores it. For the first SDLT calculation, if payment depends on a planning authority granting permission, a business reaching a target, or another future event happening, the law may require you to treat that payment as though you will make it. That is the starting assumption.
What this rule is about
Some property deals include an extra payment. You may need to pay it only when a planning authority grants permission, a business reaches a target, or another future event happens.
The future event may never happen. It is not fixed on completion day.
What the official source says
HMRC’s manual explains the definitions in Finance Act 2003. The legislation, rather than the manual, sets the legal test.
- A payment is contingent if it is due only if an uncertain future event happens.
- It is also contingent if it will stop being due if an uncertain future event happens.
- A payment is uncertain if its amount or value depends on uncertain future events.
- For a contingent payment, the SDLT calculation assumes the event happens and the payment is made.
- If a payment would cease when an event happens, the calculation assumes that event does not happen.
What this means in practice
You may need to include a possible later payment when working out stamp duty at the start. This can feel odd when you may never pay that sum. It is nevertheless the assumption the law requires for a contingent payment.
- Read the payment clause, not just the headline price.
- Identify every event linked to an extra payment.
- Ask whether that event was uncertain when the deal completed.
- Check whether the event triggers payment or brings a payment to an end.
How to analyse it
Start with the contract. What matters is how the payment works, not what the parties call it.
- List the cash price and every possible later sum.
- For each later sum, identify the event that affects it.
- Decide whether that event was uncertain at the relevant time.
- If payment depends on it happening, treat the event as happening for the initial SDLT calculation.
- If payment stops when it happens, treat the event as not happening for that calculation.
Example
Amir buys land for £400,000. The contract says he must pay a further £20,000 only if a planning authority later grants planning permission. Planning permission is an uncertain future event. In the initial stamp duty calculation, the calculation assumes that the planning authority grants permission, so it includes the £20,000 payment. The wider SDLT calculation will then depend on the rules and rates applying to Amir’s deal.
Why this can be difficult in practice
This is the part people get wrong: calling a payment an “earn-out”, “retention” or “bonus” does not settle the issue. The contract terms do.
- A delayed payment is not automatically contingent.
- A sum fixed in amount and payable on a fixed date may differ from one tied to an event.
- A condition may look uncertain, but the facts may show it was already effectively settled.
- Side letters and informal agreements can change the true payment arrangement.
Key takeaways
- Possible future payments can matter for stamp duty from the start.
- For a contingent payment, assume the payment will be made.
- The contract wording and the facts decide whether the rule applies.
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 51 — assumptions for contingent payments in SDLT calculations; definitions of contingent and uncertain payment amounts
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
- The supplied statutory text is current only to 17 November 2025. It must be checked against current legislation for a transaction after that date.
- Whether a contract condition is truly an uncertain future event can depend on its exact wording and the facts.
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 any side agreement
- The amount of each later payment
- The event that triggers, changes or stops the payment
- Evidence showing whether that event was uncertain when the deal completed
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 part of the price depends on a future event [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 51 - assumptions for contingent payments in SDLT calculations https://www.legislation.gov.uk/ukpga/2003/14/section/51/2025-11-17 - FA 2003 section 51 - definitions of contingent and uncertain payment amounts https://www.legislation.gov.uk/ukpga/2003/14/section/51/2025-11-17 Guidance page from HMRC on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm05020 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 - The supplied statutory text is current only to 17 November 2025. It must be checked against current legislation for a transaction after that date. - Whether a contract condition is truly an uncertain future event can depend on its exact wording and the facts. 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 part of the price depends on a future event
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