Guidance on LBTT for Contingent, Uncertain, or Unascertained

LBTT on price terms that depend on future events

Where part of the price for land is not fixed at the effective date, LBTT still usually has to be reported using either the known contingent amount or a reasonable estimate. The key issue is whether the extra price is contingent, uncertain or unascertained, because that affects what goes in the LBTT return and whether deferral of tax may be available.

• Contingent consideration is an amount payable only if an uncertain future event happens, or which stops being payable if that event happens.
• If the contingent amount is known, Revenue Scotland says the LBTT return should include it as if it will become payable.
• If the amount depends on future events and cannot yet be fixed, the return should include a reasonable estimate of that amount.
• The full chargeable consideration entered on the return should include both the fixed element and any contingent or estimated element.
• Deferral of LBTT may be possible in some cases, but not where the consideration is ascertainable and can be returned on a best-estimate basis.
• When the future event is resolved or the amount later becomes known, further action or a further LBTT return may be required.

Scroll down for the full analysis.

LBTT on contingent, uncertain or unascertained consideration

This page explains how Land and Buildings Transaction Tax (LBTT) deals with price terms that depend on future events. This matters where the amount payable for land is not fixed at the effective date of the transaction, for example where extra payment may become due if planning permission is obtained, or where the final amount cannot yet be calculated. The main question is what figure should go into the LBTT return and whether tax can be deferred on any part of it.

What this rule is about

LBTT is charged by reference to the chargeable consideration for a land transaction. In straightforward cases, that is simply the agreed price. But some transactions include price mechanisms that depend on future events. The legislation and Revenue Scotland guidance distinguish between three related ideas:

• contingent consideration
• uncertain consideration
• unascertained consideration

These labels matter because they affect how the consideration is entered on the LBTT return and whether an application can be made to defer payment of LBTT on the part that is not yet fixed in practical terms.

What the official source says

Revenue Scotland’s guidance refers to sections 18, 19 and 20 of the Land and Buildings Transaction Tax (Scotland) Act.

For contingent consideration under section 18, where some or all of the consideration is payable only if an uncertain future event happens, or stops being payable if an uncertain future event happens, the return is completed on the assumption that the contingency is resolved in the way that makes the amount payable, or prevents it from ceasing to be payable. If the contingent amount is known, that amount is included in the return.

For uncertain or unascertained consideration under section 19, where the amount depends on future events and is not yet fixed, the return should include a reasonable estimate of the amount.

The guidance also draws a distinction between consideration that is ascertainable and consideration that is unascertainable. Where the consideration is ascertainable, the return should be completed on the basis of a best estimate of the chargeable consideration, and a deferral cannot be sought. The guidance says this is different from unascertainable consideration.

In both cases, the full amount of chargeable consideration should be included in the total consideration field of the LBTT return, including the non-contingent part and the contingent or estimated part.

The return also asks whether any part of the consideration depends on future events. If it does, the taxpayer should answer yes and then indicate whether they have applied to pay on a deferred basis.

The guidance states that it may be possible to seek deferral on the contingent amount, or on the uncertain amount, if the relevant criteria are met. It also points to separate guidance on what happens later if the contingency ends or the consideration becomes ascertained.

What this means in practice

The practical starting point is that LBTT is not usually postponed just because part of the price depends on what happens later. The transaction still has to be reported, and the return still has to include an amount for that future-dependent element.

If the future-dependent amount is contingent but the amount itself is known, Revenue Scotland’s approach is to treat it as payable for return purposes. In other words, you do not ignore it simply because the trigger event may never happen.

If the amount is not yet known because it depends on future events, you must put in a reasonable estimate.

This can produce a result that feels artificial. A buyer may have to return, and potentially pay tax by reference to, an amount that may never actually become payable or that may later turn out to be lower or higher than estimated. That is why the possibility of deferral can be important in the right case.

However, the guidance does not say that deferral is always available. It says only that it may be possible if the relevant criteria are met. It also makes clear that where consideration is ascertainable, even if not yet finally quantified, the return should be based on a best estimate and deferral cannot be sought.

How to analyse it

A sensible way to analyse a transaction is to ask the following questions.

• Is there any part of the price that depends on future events?
• If yes, is the issue whether payment depends on a future event, or whether the amount cannot yet be calculated?
• If payment depends on an uncertain future event and the amount is known, is this contingent consideration within section 18?
• If the amount or value depends on future events, is it uncertain or unascertained within section 19?
• Can a reasonable estimate be made from the contractual mechanism and the known facts at the effective date?
• Is the amount actually ascertainable, even if some arithmetic or later evidence is still needed? If so, the guidance indicates that the return should use a best estimate and deferral is not available.
• Should an application for deferral be considered under the separate deferral guidance?
• Once the contingency ends or the amount becomes known, is a further LBTT return required under the later rules?

In practice, the contract terms are critical. The drafting should be checked carefully to see whether the clause creates:

• a fixed additional sum payable only if an event happens
• a formula whose outcome depends on future facts
• a sum that can ultimately be calculated by reference to an event that is certain to occur, but whose amount is not yet known

Those distinctions affect both the figure entered on the return and whether deferral is potentially available.

Example

Illustration: A buyer pays £500,000 for land, plus a further £100,000 if planning permission is granted within three years.

If the additional £100,000 is a known amount payable only if an uncertain future event occurs, it is contingent consideration. On the Revenue Scotland guidance, the LBTT return should include the full £600,000 in total consideration. The buyer should answer yes to the question about consideration depending on future events and then consider whether a deferral application is available under the separate deferral rules.

Now change the facts. Suppose the buyer must pay an additional amount calculated by reference to the number of units permitted by a future planning consent, so the amount cannot yet be fixed. In that case, the return should include a reasonable estimate of that future amount, together with the fixed price. Whether deferral is available will depend on whether the statutory criteria for deferral are met and on whether the amount is truly unascertainable rather than merely capable of best estimation.

Why this can be difficult in practice

The hardest part is often classification. A clause may look contingent because it refers to a future event, but the real issue may be that the amount is not yet measurable. Equally, a sum may feel uncertain commercially, while still being legally ascertainable from the contract and available evidence.

The guidance also uses terms that are close in meaning but not identical. It says:

• contingent means payable only if an uncertain future event occurs, or ceases to be payable if such an event occurs
• uncertain means the amount or value depends on uncertain future events
• unascertained means the amount or value depends on certain future events

That means the same transaction can require careful analysis of both the trigger for payment and the method for calculating the amount.

Another difficulty is the distinction between consideration that is unascertained and consideration that is merely ascertainable by best estimate. Revenue Scotland’s guidance says deferral cannot be sought where the consideration is ascertainable and the return should be completed using a best estimate. The boundary between those cases may be fact-sensitive and depend heavily on the contract wording and what is objectively knowable at the effective date.

Finally, this is not the end of the story. If the contingency later falls away, or the amount later becomes known, the later section 20 rules may require further action. So the initial return should not be treated as the final position without checking what happens when the future event is resolved.

Key takeaways

• If part of the price depends on future events, it still usually has to be reflected in the LBTT return.
• Known contingent amounts are generally returned on the assumption that they become payable; unknown amounts require a reasonable estimate.
• Deferral may be possible in some cases, but not where the consideration is ascertainable and the return can be completed on a best-estimate basis.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Guidance on LBTT for Contingent, Uncertain, or Unascertained

View all LBTT Guidance Pages Here