SDLT Adjustment Procedures for Contingency Changes or Consideration Ascertainment: Special Cases

SDLT when estimated or contingent consideration is later confirmed

If the price for a land transaction was only estimated at first, or no return was filed because the estimated amount was below the filing threshold, you may need to update HMRC once the true consideration becomes known. This can mean filing a further notification, paying extra SDLT, or claiming a repayment, and the deadline is usually 30 days from when the amount is known.

• If an SDLT return was filed using an estimate, HMRC expects a further notification when the actual consideration is known, usually by letter quoting the original transaction reference.
• If the final consideration is higher than first reported, any extra SDLT must generally be paid within 30 days of the amount becoming known; if lower, a repayment may be claimed.
• If no return was filed because the estimate was below the notification threshold, a return is only needed later if the actual consideration exceeds the threshold that applied on the original effective date.
• The transaction is not treated as new: the original effective date normally stays the same, and the actual consideration is linked back to that original transaction.
• Late notification can trigger penalties, and interest on underpaid SDLT may run from 30 days after the original effective date, unless section 90 deferment applies.
• A key practical issue is identifying the date when the consideration truly became known, as that affects filing deadlines, penalties and interest.

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SDLT when estimated or contingent consideration later becomes known

This page explains what happens if a land transaction was reported for SDLT using an estimate, or was not reported because the estimated consideration was below the filing threshold, and the true amount is later established. The practical point is simple: once the consideration becomes known, you may need to tell HMRC, pay more tax, or claim a repayment. The timing matters, because late action can trigger penalties and interest.

What this rule is about

Some property transactions do not have a final, fixed price on the effective date. The amount payable may depend on a future event, or the parties may only be able to estimate the consideration at first. SDLT still has to be considered at that stage, using the rules that apply to estimated or contingent consideration.

This HMRC material deals with what happens later, when the uncertainty ends and the actual consideration can be worked out. It is concerned with procedure: whether a further notification is needed, what information HMRC expects, when payment must be made, and how penalties and interest are dealt with.

What the official source says

HMRC describes three main situations.

First, the original transaction was notified on an SDLT return, but no tax was due because the estimated consideration was below the tax threshold. If the consideration later becomes known and the actual amount is higher, a further return is required. HMRC says this should be done by letter to the Stamp Office. The letter should include the unique transaction reference number for the original return, details of the actual consideration, a self-assessment of any tax now due, and payment within 30 days of the consideration becoming known.

Second, the original transaction was notified and SDLT was paid based on an estimate. When the consideration is later ascertained, a further return is again required, also by letter. The letter should include the original transaction reference, the actual consideration, and a self-assessment of the tax position. If the original estimate was too low, additional tax must be paid within 30 days of the consideration becoming known. If the original estimate was too high, a repayment can be claimed.

Third, the original transaction was not notified because the estimated consideration was below the notification threshold. If the actual consideration is still below the threshold that applied on the original effective date, nothing further is required. But if the actual consideration is above that threshold, an SDLT1 must be filed showing the full details of the transaction. HMRC says the consideration entered should be the actual consideration, and the effective date should remain the original effective date of the transaction.

HMRC also states that the return notifying the actual consideration must be made within 30 days of the amount becoming known. If not, penalties may apply. In the case where no original return was filed because the estimate was below the notification threshold, HMRC says a penalty will be payable and is calculated from the original effective date.

On interest, HMRC says that where tax becomes payable because the original estimate was too low, interest runs from 30 days after the original effective date. If tax is repayable because the estimate was too high, interest is added from the date HMRC received the overpayment. HMRC adds an important qualification: where deferment under section 90 was claimed, penalty and interest run instead from the date the contingency ceased or the consideration became known.

What this means in practice

The key practical point is that HMRC treats the later determination of the price as something that can reopen the SDLT position for the original transaction. The transaction itself is not new. The effective date usually stays the same. What changes is that the true consideration has now been established.

If you filed originally using an estimate, you should compare the actual consideration with what was reported. If the true amount is higher, there may be extra SDLT to pay. If it is lower, there may be a repayment claim. Either way, HMRC expects a further notification.

If you did not file originally because the estimated amount was under the filing threshold, do not assume the matter is closed. You need to revisit the position once the amount is known. If the actual consideration crosses the notification threshold that applied at the time of the original transaction, HMRC expects a return to be filed for that original transaction.

The timing rules are important in two different ways.

First, HMRC says the further notification must be made within 30 days of the consideration becoming known. That is the immediate compliance deadline once the uncertainty ends.

Second, interest on underpaid tax may run from much earlier, namely from 30 days after the original effective date. So even if the taxpayer could not know the final amount at the outset, the interest position may still be backdated unless a section 90 deferment applies.

How to analyse it

A sensible way to approach this issue is to ask the following questions.

• Was the original transaction notified to HMRC at all?
• If it was notified, was the consideration final or was it only estimated?
• Was any SDLT paid on the original filing?
• Has the consideration now become known, and if so, on what date did that happen?
• Is the actual consideration higher or lower than the amount previously used?
• If there was no original return, does the actual consideration now exceed the notification threshold that applied on the original effective date?
• Was any deferment under section 90 claimed, since that affects when interest and penalties run?

Once those points are clear, the procedural outcome is usually easier to identify:

• Original return filed, no tax paid, actual amount now higher: notify HMRC and pay any SDLT due within 30 days of the amount becoming known.
• Original return filed, tax paid on estimate: notify HMRC again when the true amount is known, paying any shortfall or claiming any repayment.
• No original return because estimate was below filing threshold: check the actual amount against the original threshold. If it is now above that threshold, file a return for the original transaction.

It is also important to distinguish between the notification threshold and the tax threshold. HMRC’s page refers to both. In some cases, a transaction may originally have been notified even though no tax was due. In other cases, no return may have been required at all. The correct procedural step depends on which of those applied.

Example

Illustration: a buyer acquires land under an agreement where part of the price depends on a later valuation. On completion, the buyer estimates the total consideration and files an SDLT return on that basis. No SDLT is due because the estimate is below the relevant tax threshold.

Several months later, the valuation is finalised and the actual consideration is higher. At that point, the buyer must notify HMRC of the actual amount, identify the original return using its transaction reference, calculate any SDLT now due, and pay it within 30 days of the consideration becoming known.

If the transaction had not been notified originally because the estimate was below the filing threshold, the buyer would instead need to ask whether the final amount now exceeds the notification threshold that applied on the original effective date. If it does, an SDLT1 would be required for that original transaction.

Why this can be difficult in practice

The main difficulty is identifying when consideration has truly become “ascertained” or “known”. In straightforward cases, that will be clear, such as when a formula is finally applied or a valuation is issued. In more complex transactions, there may be room for argument about whether the amount was known earlier, whether only part of it was known, or whether the contingency had in fact ceased.

Another difficulty is that the filing deadline and the interest rules do not work in quite the same way. HMRC says the further notification is due within 30 days of the amount becoming known, but interest on underpaid tax may run from 30 days after the original effective date. That can produce an unwelcome result where the taxpayer acted honestly on an estimate but the final amount turns out to be higher.

There is also a practical difference between HMRC manual guidance and the legislation itself. This page sets out HMRC’s procedural approach. It is useful, but it should be read as HMRC guidance on how to notify and adjust the SDLT position, not as a substitute for the statutory rules on contingent, uncertain or deferred consideration.

Finally, the reference to section 90 deferment matters. Where that relief mechanism was used, HMRC says the penalty and interest position runs from the date the contingency ceased or the consideration became known, rather than from the original effective date. That can materially change the outcome.

Key takeaways

• If estimated consideration later becomes known, the SDLT position may need to be updated even though the original transaction date stays the same.
• Where the final amount is higher, extra SDLT may be payable; where it is lower, a repayment may be due.
• The further notification is generally due within 30 days of the consideration becoming known, but interest on underpaid tax may run from much earlier unless section 90 deferment applies.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: SDLT Adjustment Procedures for Contingency Changes or Consideration Ascertainment: Special Cases

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