Read the original guidance here:
HMRC SDLT: SDLTM50300 – Procedure: Adjustment where contingency ceases or consideration is ascertained FA03/S80

Adjustment Procedures for Contingent Considerations

When part or all of the payment in a land transaction depends on a future event or is uncertain, special rules apply as defined by the Finance Act 2003, Section 51 (FA03/S51). More information on this can be found at SDLTM05010.

Understanding Contingency

When submitting a return based on a contingent amount, FA03/S51 states that the return assumes the following:

• The contingent event will happen.
• Additional payments will need to be made.

If it later becomes evident that the contingency will not occur, you must adjust your initial return according to FA03/S80.

Adjusting Your Return within the Twelve-Month Period

If you are within a twelve-month period from the original return date, you should amend your previous assessment as per FA03/Schedule 10, Paragraph 6 (FA03/SCH10/PARA6).

Adjusting Your Return After the Twelve-Month Period

If the twelve-month period has passed, a claim must be made under FA03/Schedule 11A (FA03/SCH11A).

Impact of No Enquiries

If there are no questions raised about your amended return, the amount of Stamp Duty Land Tax (SDLT) you owe will be adjusted, and if you have paid too much, you will receive a refund.

You will also receive interest on the repayment backdated to when you initially paid the tax.

Handling Uncertainty in Transactions

If your return was based on uncertainty, or a mix of contingency and uncertainty, FA03/S80 states that once an uncertain amount is discovered:

• If more SDLT is required, you must submit a new land transaction return.
• If the transaction is now notifiable or chargeable for the first time, a return is also required.

Submitting a New Return

When a return is needed due to these conditions, it must be done within:

• 30 days from when you become aware of the final payment amount.
• 14 days from the date the consideration is known for transactions becoming notifiable after 1 March 2019.

The return must:

• Include a self-assessment of the SDLT due based on the information in the return.
• Calculate the tax using the rates that were in effect on the transaction’s effective date.
• Note that interest charges start from the effective date of the transaction, not when the uncertain amount was figured out (refer to FA03/S87(4)).

Forms for Submission

If a transaction was not previously reported, use form SDLT1 or an electronic equivalent to submit your return. For cases where an SDLT1 form was submitted when the transaction was completed, a further report should be sent in the form of a letter. This letter must clearly state the changes needed to the original return.

Where to Send Your Return

All returns, along with any tax payment, should be directed to the Birmingham Stamp Office. The address can be found on the HMRC website.

What to Do If You’ve Overpaid Tax

If, after receiving new information, it turns out that you owe less tax due to uncertainty, follow these steps:

• If you are still within the twelve-month period, amend your return according to FA03/SCH10/PARA6.
• If more than twelve months have passed, submit a claim under FA03/SCH11A.
• Send your amended return to HMRC Stamp Taxes, whose address is provided on their website.

For any overpaid tax, interest will accumulate from the date you made the original tax payment.

Enquiry Procedures and Penalties

Be aware that the rules from FA03/SCH10 apply to returns made under FA03/S80 in the same way that they apply to returns submitted per FA03/S76.

This includes HMRC’s authority to inquire into your submissions and the potential penalties for late returns.

HMRC also reserves the right to investigate amended returns and claims sent under FA03/SCH11A. More details on this can be found at SDLTM05040+.