Deferring stamp duty where you pay with works or services
In brief
Where work or services form part of a land deal, their value may affect SDLT. HMRC’s manual describes a way to defer payment on the uncertain part where an application is accepted.
- Short projects: HMRC says payment is due within 30 days of completion.
- Longer projects: the application should include stages at least six months apart.
- The legal treatment of the work itself comes first.
Scroll down for the full analysis.
Read the original guidance here:
Deferring stamp duty where you pay with works or services
If part of the price for land is work or services rather than cash, you may be able to delay some stamp duty land tax payments.
This is not an automatic delay. HMRC’s manual describes a special payment timetable for an accepted application.
What this rule is about
Most property deals use money. Some do not. A buyer may agree to carry out building work or provide services as part of what they give for the land.
Ask first whether the work or service forms part of the property price for SDLT. If it does, its value may not be known at the start. That is where a payment delay can matter.
The law normally deals with an uncertain amount by using a reasonable estimate. It also allows a buyer to apply to defer tax where an uncertain future amount may fall due more than six months after the relevant tax date.
What the official source says
HMRC says there are special rules for an accepted deferral application where works or services make up part of the amount paid for land. The buyer’s expected timetable for the work or services determines the payment pattern.
- If the buyer expects them to finish within six months, HMRC says the tax on that part must be paid no later than 30 days after completion.
- For longer work, applications need payment dates.
- The gaps between those dates must be at least six months.
- The buyer should make the final payment 30 days after the work or services finish.
- HMRC says it calculates each payment by reference to the value of work or services completed at that stage.
- Near the end, the buyer may ask HMRC to vary the timetable.
- HMRC’s example avoids a near-completion six-monthly payment. No further payment follows just days later.
HMRC also says that, from 1 March 2019, a return and tax are due within 14 days after completion where the transaction becomes notifiable for the first time.
Finance Act 2003 requires a 14-day return where later information first makes a transaction notifiable.
What this means in practice
Only uncertain future work or services qualify. It does not put the whole SDLT bill on hold.
Tax on known cash or calculable amounts remains due as usual.
Improvement promises do not always create deferral cases. Some post-completion works do not count towards the amount paid for the land at all.
- Check whether the agreement says the work is part of the price.
- Check whether the work will happen after the relevant tax date.
- Check where the work will be done.
- Check whether the seller, or someone linked to them, must do the work.
- Work out the open-market value of the work or services.
- Keep the tax due on known cash amounts separate from the uncertain part.
How to analyse it
Start with the deal itself, not the label used in the contract. Calling something a renovation package or service agreement does not decide the SDLT result.
- Identify everything the buyer gives in return for the land.
- Decide whether the work is construction, improvement, repair, or another service.
- For works, apply the conditions in Schedule 4 paragraph 10.
- For services, use their open-market value.
- Decide whether the amount is uncertain or depends on a future event.
- Check whether any future amount may fall more than six months after the relevant tax date.
- Prepare an application that separates the known amount from the uncertain amount.
- If the work will exceed six months, set out stage dates at least six months apart.
HMRC’s manual says the application should be made in writing, quote the full transaction reference, and be sent using its SDLT contact route.
Check HMRC’s current contact details before sending it.
Example
Amir buys a site. He agrees to provide £120,000 of building work as part of the deal. Assume Amir expects 12 months of work. It counts towards the price for SDLT.
His application could set out staged payments. If work valued at £55,000 has been completed at the first stage, HMRC’s manual says the payment is based on that completed value. The final amount is due 30 days after all the work finishes.
Now change one fact. If the work meets all the conditions that exclude it from the SDLT price, its value does not count for that purpose. The special deferred-payment method may then have nothing to delay.
Why this can be difficult in practice
The difficult question is often not the timetable. It is whether the promised work counts as part of the price in the first place.
Small contract details can change the answer. So can the true market value of specialist work or services. A rough estimate may be hard to support later.
- Work done after the tax date is not automatically outside SDLT.
- Work done on the bought land is not automatically part of the SDLT price.
- A completion forecast may change as a project progresses.
- A six-monthly date close to completion may justify asking HMRC to vary the timetable.
- Do not assume that a deferred amount means no SDLT return is needed.
Key takeaways
- Works or services can form part of the price for land.
- HMRC describes staged payments for accepted deferral applications.
- Known cash amounts are not deferred by the application.
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 — valuing contingent or uncertain amounts paid for land
- FA 2003 section 80 — later returns and tax adjustments after amounts become known
- FA 2003 section 90 — applications to defer tax on uncertain future payments
- FA 2003 Schedule 4 para 10 — when building works count towards the property price
- FA 2003 Schedule 4 para 11 — valuing services given as part of the property price
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 material does not include the regulations that govern the detailed form, timing and effect of a section 90 application. The manual’s payment timetable should therefore be checked against the current regulations before it is relied on.
- Whether work counts towards the amount paid for land can depend on the contract, when and where the work is done, and the relationship between the parties.
- This page cannot confirm the current contact route or whether HMRC will accept a proposed revised payment timetable in a particular case.
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 agreements
- A description and valuation of the works or services
- The expected start and completion dates
- Invoices, progress reports and completion evidence
- The transaction reference and any SDLT return already filed
- A proposed payment timetable for work expected to exceed six months
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 Deferring stamp duty where you pay with works or services [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 - valuing contingent or uncertain amounts paid for land https://www.legislation.gov.uk/ukpga/2003/14/section/51/2025-11-17 - FA 2003 section 80 - later returns and tax adjustments after amounts become known https://www.legislation.gov.uk/ukpga/2003/14/section/80/2025-11-17 - FA 2003 section 90 - applications to defer tax on uncertain future payments https://www.legislation.gov.uk/ukpga/2003/14/section/90/2025-11-17 - FA 2003 Schedule 4 para 10 - when building works count towards the property price https://www.legislation.gov.uk/ukpga/2003/14/schedule/4/paragraph/10/2025-11-17 - FA 2003 Schedule 4 para 11 - valuing services given as part of the property price https://www.legislation.gov.uk/ukpga/2003/14/schedule/4/paragraph/11/2025-11-17 HMRC's guidance page on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm50920 HOW I WANT YOU TO ANSWER 1. Work from the legislation above. Read it before answering. HMRC guidance is HMRC's 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 material does not include the regulations that govern the detailed form, timing and effect of a section 90 application. The manual's payment timetable should therefore be checked against the current regulations before it is relied on. - Whether work counts towards the amount paid for land can depend on the contract, when and where the work is done, and the relationship between the parties. - This page cannot confirm the current contact route or whether HMRC will accept a proposed revised payment timetable in a particular case. 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 1 September 2026
Useful article? You may find it helpful to read the original guidance here: Deferring stamp duty where you pay with works or services
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