Guide to Deferring Stamp Duty Payment for Contingent or Uncertain Consideration

Applying to defer SDLT on contingent or uncertain purchase price

If part of the price for land is not fixed when the transaction becomes effective, a buyer may ask HMRC to defer the SDLT linked to that uncertain amount. The request must be made in writing within 30 days of the effective date and must include enough factual and tax detail for HMRC to assess it.

• The application procedure is set by the Stamp Duty Land Tax (Administration) Regulations 2003 and must be sent to HMRC’s Stamp Office marked “SDLT Deferment Applications”.
• The buyer must identify the purchaser and property, explain the contingent or uncertain payment, state the amount for which deferment is sought, and give as much detail as possible about when the amount may become payable or known.
• The application must also include a reasoned view on when the uncertainty will end, the SDLT due on the full consideration, and the amount of SDLT the buyer wants deferred.
• Timing is critical: HMRC says late applications cannot be accepted, and the 30-day limit runs from the transaction’s effective date, not from when the final amount is later worked out.
• HMRC can ask for more information and must allow at least 30 days to respond, but it may refuse the application if the reply is not provided in time.
• Only the SDLT amount covered by the deferment request is suspended while HMRC decides the application; this procedure does not itself guarantee that deferment will be allowed.

Scroll down for the full analysis.

How to apply to defer SDLT where part of the price is contingent or uncertain

This page explains the procedure for asking HMRC to defer payment of Stamp Duty Land Tax where part of the consideration is contingent or cannot yet be ascertained. The point matters because SDLT can in some cases be calculated by reference to amounts that may not be fixed at completion, but a purchaser may be able to ask HMRC to postpone payment of the tax attributable to that uncertain element.

What this rule is about

Some land transactions include consideration that is not fully fixed on the effective date of the transaction. For example, part of the price may depend on a future event, or the amount may not yet be known. In those cases, the purchaser may want HMRC to defer the SDLT that relates to that part of the consideration.

This page is about the application process only. It does not set out the full substantive rules on when deferment is available. Its focus is how, when, and with what information the application must be made.

What the official source says

HMRC says the procedure is governed by paragraphs 10 to 28 of the Stamp Duty Land Tax (Administration) Regulations 2003. An application must be made in writing within 30 days after the effective date of the transaction, as defined by section 119 Finance Act 2003. HMRC states that applications made after that time cannot be accepted.

The application should be sent to HMRC’s Stamp Office and clearly marked “SDLT Deferment Applications”.

The written application must include:

• the identity of the purchaser
• the location of the land
• the nature of the contingency or uncertain payment
• the amount of consideration for which deferment is sought
• as much detail as possible about when payments are expected
• a reasoned view on when that part of the consideration will stop being contingent or will become ascertainable
• a calculation of the SDLT payable on the total of the actual consideration and the contingent or uncertain consideration
• a calculation of the SDLT that the purchaser wants HMRC to defer

HMRC may ask for further information before deciding whether to accept the application. If it does, HMRC must say what information it requires and must give the purchaser at least 30 days to provide it. If the information is not provided within the time allowed, HMRC may refuse the application.

Once an application has been made to defer an amount of SDLT, that amount is suspended until HMRC has reached a decision on the application.

What this means in practice

The main practical point is timing. If a purchaser wants deferment, the application must be made quickly. The 30-day deadline runs from the effective date of the transaction, not from the date when the uncertain amount later becomes known. On HMRC’s published view, a late application cannot be accepted.

The application also needs to be sufficiently detailed. HMRC is not just asking for a statement that the consideration is uncertain. It wants enough information to understand:

• what part of the price is fixed and what part is not
• why the amount is contingent or uncertain
• when the uncertainty may be resolved
• how much SDLT would be due in total if the whole amount were brought into account
• how much of that SDLT the purchaser wants postponed

This means the purchaser usually needs to have done the SDLT computations before applying. The application is not just procedural correspondence. It is effectively a reasoned tax submission.

Another important practical point is that only the amount sought to be deferred is suspended while HMRC considers the application. The source does not suggest that all SDLT liabilities are put on hold. In practice, the purchaser should distinguish between SDLT that is clearly due now and SDLT that is the subject of the deferment request.

How to analyse it

A sensible way to approach this is to work through the following questions:

• What is the effective date of the transaction? This determines the filing window for the deferment application.
• Is there consideration that is contingent, uncertain, or both? Identify exactly which part of the price gives rise to the issue.
• How much consideration is affected? HMRC will expect the amount for which deferment is sought to be stated.
• What is the mechanism that will fix the amount later? For example, a formula, performance condition, valuation event, or other contractual trigger.
• When is that mechanism likely to operate? HMRC asks for as much detail as possible about expected payment timing.
• When is the uncertainty likely to end? The application must include a reasoned opinion, not just a guess.
• What is the SDLT on the total consideration, including the contingent or uncertain amount?
• What part of that SDLT is the amount the purchaser wants deferred?
• Is the application complete enough to avoid an HMRC information request?

In practical terms, the purchaser or adviser should be able to show their workings. If the contract contains a contingent payment clause, earn-out style provision, overage clause, or other variable price term, the explanation should tie closely to the contract wording.

Example

Illustration: a buyer acquires land for a fixed sum plus an additional amount that will only become payable if a future planning event occurs. On completion, the buyer wants HMRC to defer the SDLT attributable to that additional amount.

To do that, the buyer must send a written application within 30 days of the effective date. The application should identify the buyer and the property, explain the planning-related contingency, state the amount for which deferment is sought, explain when the additional payment might become due, give a reasoned view on when the uncertainty will end, calculate the SDLT on the full consideration, and show the part of that SDLT that the buyer wants deferred.

If HMRC then asks for more information, the buyer must provide it within the period HMRC allows, which must be at least 30 days. While HMRC is deciding the application, the amount applied for is suspended.

Why this can be difficult in practice

The procedure sounds straightforward, but several points can be awkward in real transactions.

First, identifying the effective date is not always simple. The source refers to the statutory definition in Finance Act 2003 section 119, and the timing of the application depends on it. If the parties assume the wrong effective date, they may miss the deadline.

Second, the application requires a “reasoned opinion” about when the consideration will cease to be contingent or become ascertainable. In some transactions that may be hard to predict. The purchaser still needs to provide a genuine and reasoned view based on the contract and the known facts.

Third, HMRC asks for calculations both of the SDLT on the total consideration and of the SDLT to be deferred. That can be difficult where the uncertain amount may interact with SDLT rate bands or other features of the transaction. The source does not explain how to resolve every computational complication, so care is needed.

Fourth, HMRC may request further information. If the original application is thin or unclear, that can create delay and increase the risk of refusal if the response is not made in time.

Finally, this page is about procedure, not entitlement. Making the application in time and in the right form does not by itself mean HMRC will accept that deferment is available.

Key takeaways

• The application to defer SDLT on contingent or uncertain consideration must be made in writing within 30 days of the transaction’s effective date.
• The application must contain detailed factual and computational information, including the SDLT on the total consideration and the amount sought to be deferred.
• Once the application is made, the amount applied for is suspended until HMRC decides the request, but HMRC can ask for more information and may refuse the application if it is not provided in time.

This page was last updated on 24 March 2026

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

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