HMRC SDLT: SDLTM50950 – Procedure: Notification of additional events taking place

Procedure: Notification of Additional Events Taking Place

This section of the HMRC internal manual outlines the procedure for notifying additional events. It provides guidance on how to handle these notifications effectively.

• Details the steps required for notifying additional events.
• Explains the importance of timely and accurate notifications.
• Includes information on relevant forms and documentation.
• Offers guidance on compliance with HMRC regulations.
• Emphasises the role of accurate record-keeping in the notification process.

SDLTM50950 – Procedure: Notification of Additional Events Taking Place

According to Section 90 of the Finance Act 2003, if there is contingent consideration related to a property transaction, a notification must be made within 30 days once that consideration is known. This notification has certain requirements that need to be followed to ensure compliance with the regulations.

What is Contingent Consideration?

Contingent consideration refers to additional payments that may need to be made in the future based on certain conditions being met after the initial transaction has taken place. This could happen in various scenarios, such as when a property is sold and additional payments are agreed upon if certain milestones are achieved, like plot sales in a development.

Notification Process

The notification process varies depending on whether a return was previously required or not:

• If a return was not needed before, you must submit an SDLT1 form and pay any additional tax owed within 14 days from the date the consideration became known.
• If you have already notified the transaction, you need to send another return in the form of a letter within 30 days from when the new consideration was acknowledged. This letter should be sent to the Stamp Office at the designated address.

Details Required in the Notification

Your notification needs to include the following important details:

• The deferment reference number that was provided in the initial transaction.
• If you owe additional tax, you should either include a cheque or provide the information for an electronic payment.

Handling Multiple Additional Payments

If more than one additional payment arises within a calendar month—such as from multiple plot sales—you must provide specific details in your notification letter:

• List all individual sales and include a breakdown of the additional consideration paid for each plot during that month.
• Include the tax due for each of these transactions. However, if this notification is the first relating to the transaction, an SDLT1 form is required instead.

Payment Considerations

When notifying additional consideration, it is essential to consider the total transaction value. This ensures the correct rate of tax is applied to both the initial payment and the contingent consideration. The HMRC provides examples to illustrate this, which can be referenced in SDLTM50900a.

If You Paid Too Much Tax

If the notification indicates that less tax is owed than what you have already paid, the excess amount can be refunded. To receive this refund along with interest from the date of the initial payment, a claim needs to be submitted by the purchaser.

Learn more about SDLT Procedures

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