Can you pay SDLT in instalments before completion?

Introduction

Buyers sometimes ask whether Stamp Duty Land Tax (SDLT) can be paid in instalments, especially where they are short of funds just before completion. This usually happens when a conveyancer will not complete the purchase unless the SDLT money is already available. The key point is that SDLT is normally payable in full shortly after the effective date of the transaction, and a private payment arrangement with HMRC is not the same thing as a right to defer payment for completion purposes.

The Question

A buyer wanted to know how to pay an SDLT liability of about £27,500 by instalments. The issue became urgent because the buyer’s solicitors said they could not complete the property purchase without the SDLT funds being available.

Nick’s Explanation

Nick’s reply was straightforward. In anonymised form, his advice was:

“If you wish to pay a stamp duty liability in instalments, you can contact HMRC and attempt to arrange a ‘Time to Pay’ payment plan. Please be aware that interest will be charged on any outstanding stamp duty.”

The important feature of that answer is the word “attempt”. HMRC may agree a Time to Pay arrangement in some cases, but this is a collection and enforcement matter. It does not create a general entitlement to complete a purchase without having the SDLT funds available, and it does not oblige a conveyancer to proceed if the tax cannot be paid when due.

The Law

SDLT is charged under Finance Act 2003. In a standard land transaction, a land transaction return must be delivered and the tax must be paid within the statutory filing and payment window after the effective date of the transaction.

The main legal framework includes:

• Finance Act 2003, which imposes SDLT and governs returns and payment
• Finance Act 2003, section 76, dealing with the duty to deliver a land transaction return
• Finance Act 2003, section 87, dealing with payment of tax
• Finance Act 2003, section 90, which allows deferred payment in limited cases involving contingent, uncertain or unascertained consideration

Section 90 is narrow. It does not provide a general instalment option simply because the buyer does not currently have the funds. It applies where the consideration itself is contingent, uncertain or unascertained, and the statutory conditions are met.

Separately, HMRC may in practice agree a Time to Pay arrangement for tax debts. That is an administrative collection arrangement. It is not the same as the statutory deferred payment rules in Finance Act 2003, section 90.

Analysis

The position can be broken down into four practical points.

First, most ordinary residential purchases do not qualify for statutory deferred payment under Finance Act 2003, section 90. If the purchase price is fixed and known, SDLT is calculated in the usual way and paid in the normal time limit.

Second, asking HMRC for a Time to Pay arrangement is possible, but it is discretionary. HMRC may refuse. Even if HMRC is willing to discuss payment over time, that does not necessarily solve a pre-completion problem, because the buyer’s conveyancer still has to ensure the SDLT return can be filed and the tax dealt with properly after completion.

Third, conveyancers are often unwilling to complete unless they hold enough money to meet SDLT and other completion costs. That is because completion triggers the need to file the SDLT return and pay the tax within the statutory deadline, and registration at HM Land Registry usually depends on the SDLT process being dealt with correctly.

Fourth, interest will usually accrue on unpaid SDLT, and penalties may also arise if the return or payment is late. So even where HMRC allows extra time, the amount payable may increase.

In short, there is a clear difference between:

• a statutory right to defer SDLT in a qualifying contingent or uncertain consideration case, and
• a discretionary request to HMRC for more time to pay an ordinary SDLT debt

For a normal purchase with a fixed SDLT bill, the second route is the only realistic one, and it may not help with completion if the solicitor will not proceed without cleared funds.

Outcome

A buyer who cannot currently fund an ordinary SDLT liability does not usually have a legal right to pay by instalments before completion. They can ask HMRC for a Time to Pay arrangement, but HMRC does not have to agree, and a solicitor may still refuse to complete unless the SDLT funds are in place. Where the price is fixed and known, the special deferred payment rules in Finance Act 2003, section 90 will usually not apply.

Practical Steps

• Ask your conveyancer whether the transaction is an ordinary fixed-price purchase or whether there is any genuinely contingent or uncertain consideration.
• If it is an ordinary purchase, assume SDLT must be funded in the usual way unless HMRC expressly agrees otherwise.
• Contact HMRC as early as possible if you need a Time to Pay arrangement, rather than waiting until the day before completion.
• Check with your conveyancer whether they will complete if HMRC is considering, but has not yet agreed, a payment plan. In many cases the answer will be no.
• Factor in interest and any potential penalties if payment will be late.
• If you believe section 90 may apply because the consideration is contingent, uncertain or unascertained, get specific tax advice on whether the statutory conditions are met and how the application should be made.

Conclusion

In most standard property purchases, SDLT cannot simply be switched to instalments because the buyer is short of funds. HMRC may agree a Time to Pay arrangement, but that is discretionary and may not allow completion to go ahead. Unless the case falls within the limited deferred payment rules for contingent or uncertain consideration, SDLT should be treated as a tax that must be funded in the normal way.

Legal References Used

• Finance Act 2003
• Finance Act 2003, section 76
• Finance Act 2003, section 87
• Finance Act 2003, section 90
• HMRC SDLTM50910 – Procedure: deferring payment in case of contingent or uncertain consideration FA03/S90: how the application is to be made

This page was last updated on 22 March 2026.

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