Guide on Deferring SDLT Payment for Contingent or Uncertain Consideration

Deferring SDLT on Land Deals with Uncertain Future Payments

When part of the price for land depends on a future event, such as planning permission, SDLT is not automatically delayed. If HMRC accepts a deferral application, SDLT is still paid in the normal time on any fixed amount already paid, and the uncertain amount is dealt with later when the trigger event happens.

• These rules often apply to overage or uplift clauses where extra money becomes payable only if a future event occurs.
• A successful deferral application only covers the contingent or uncertain part of the price, not the fixed upfront payment.
• When the relevant event happens, the buyer must file a further SDLT return within 30 days.
• SDLT is then recalculated using the total consideration actually payable at that stage, and the buyer pays any extra tax due after deducting SDLT already paid.
• The key practical issue is identifying the exact contractual trigger, as this may be the grant of planning permission, a satisfactory permission, implementation, or another milestone.
• The final SDLT result depends on what actually happens after completion, not on what the parties expected at the start.

Scroll down for the full analysis.

Deferring SDLT where part of the price depends on a future uncertain event

This page explains how deferred payment of Stamp Duty Land Tax can work when part of the price for land is not fixed at completion and depends on something that may happen later, such as planning permission being granted. The key point is that SDLT is not automatically postponed just because the final price is uncertain. A deferral application is needed, and even if that application succeeds, SDLT may still be payable straight away on any amount that has already been paid and is not contingent.

What this rule is about

Some land deals include an upfront payment plus further amounts that only become payable if a future event happens. A common example is an overage or uplift clause, where the buyer pays more if planning permission is later obtained.

That creates a practical problem for SDLT. The tax is charged by reference to chargeable consideration, but at the effective date of the transaction the total price may not yet be known. Finance Act 2003 section 90 allows, in some cases, payment of SDLT on contingent or uncertain consideration to be deferred.

The official material here is not setting out the whole legal test for deferral. Instead, it gives examples of how the rules operate once a deferral application has been made and accepted.

What the official source says

The source gives two examples where land is bought for an initial fixed payment, plus additional payments linked to the number of houses for which planning permission is granted later.

In both examples:

• the buyer applies to defer SDLT because the later payments are uncertain,
• the application is successful, and
• the “relevant event” for the regulations is the grant of planning permission.

The source then shows two important consequences.

First, SDLT is still payable within the normal time limit on any amount that is not contingent and has already been paid. Deferral does not suspend tax on the fixed upfront price.

Second, when the relevant event happens and the uncertain amount becomes known, the buyer must make a further return to HMRC within 30 days of that event. The SDLT is then recalculated on the total consideration actually payable at that point, and the buyer pays the difference between:

• the SDLT due on the total consideration now known, and
• the SDLT already paid earlier.

What this means in practice

If part of the purchase price depends on a future trigger, the transaction is not simply ignored for SDLT until the trigger happens. The fixed part and the contingent part are treated differently.

Where a deferral application succeeds:

• the fixed amount already paid is taxed in the normal way at the outset, and
• the uncertain part is dealt with later, when the relevant event occurs and the additional amount becomes payable.

This matters because the buyer may still have an immediate SDLT liability even though the final price is unresolved.

It also matters administratively. The buyer must monitor the relevant event carefully. Once that event happens, there is a fresh SDLT filing obligation within 30 days, and the tax is recalculated by reference to the total consideration as it then stands.

The examples also show that the eventual amount can be more or less than originally expected. The SDLT position follows what actually happens, not just what the parties expected at completion.

How to analyse it

A sensible way to approach this type of transaction is:

• Identify the fixed amount payable at the effective date of the transaction.
• Identify any further amount that depends on a future event, such as planning permission.
• Ask whether an application to defer SDLT on the uncertain amount has been made and accepted.
• Identify the relevant event that will crystallise the uncertain consideration.
• Pay SDLT in the normal time on any non-contingent amount already paid.
• When the relevant event happens, calculate the total consideration actually payable as a result.
• File a further return within 30 days of that relevant event.
• Pay the additional SDLT, being the difference between the total SDLT now due and the SDLT previously paid.

In practical terms, conveyancers and tax advisers should make sure the contract clearly identifies the trigger for further payments and that someone is responsible for tracking that trigger after completion.

Example

Illustration based on the official examples:

A buyer pays £350,000 on completion for land. The contract also says the buyer must pay another £50,000 for each tranche of 50 houses for which planning permission is later granted. The buyer expects permission for 200 houses, but the amount is uncertain at completion. A deferral application is made and succeeds.

At completion, SDLT is still due on the fixed £350,000 already paid. The source calculates this at £7,000.

Later, planning permission is granted for 200 houses, so a further £200,000 becomes payable. Total consideration is now £550,000. The source calculates total SDLT on that amount at £17,000. Since £7,000 was already paid, a further £10,000 is due. The buyer must make a further return within 30 days of the planning permission event.

The second official example shows the same structure where the upfront payment is only £100,000. Because that amount falls below the threshold used in the example, no SDLT arises initially. Later, planning permission for 300 houses is granted, triggering a further £300,000 payment. Total consideration becomes £400,000, and the source calculates total SDLT due at that stage as £9,500. That amount becomes payable when the relevant event occurs, with a further return required within 30 days.

Why this can be difficult in practice

The difficult part is often not the arithmetic but identifying exactly when the relevant event has occurred and what amount has thereby become payable.

For example, planning-related clauses can be drafted in different ways. The trigger might be:

• the grant of any planning permission,
• the grant of a satisfactory planning permission,
• implementation of the permission, or
• some other contractual milestone.

The source examples assume that obtaining planning permission is the relevant event. In real transactions, the contract and the terms of any successful deferral application need to be checked carefully.

Another practical difficulty is that expectations at completion may turn out to be wrong. In the second example, the buyer expected permission for 200 homes but actually received permission for 300. The SDLT outcome follows the actual later event, not the earlier estimate.

The source material also assumes that the deferral application has been accepted. It does not explain in these examples when an application may or may not succeed. That question depends on the wider statutory and regulatory framework, not just these illustrations.

Key takeaways

• A successful deferral application does not stop SDLT being due on fixed consideration already paid.
• When the future trigger happens, SDLT is recalculated on the total consideration then payable, and a further return is required within 30 days.
• The practical focus is on the contract trigger, the actual amount that becomes payable, and the SDLT already paid earlier.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Guide on Deferring SDLT Payment for Contingent or Uncertain Consideration

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