Guidance on LBTT for Contingent, Uncertain, or Unascertained

LBTT where the purchase price depends on future events

When part of the price for land or buildings is not fixed on the effective date, LBTT usually still has to be reported and may be payable before the final figure is known. The treatment depends on whether the extra amount is contingent, uncertain, unascertained, or already ascertainable, and this also affects whether deferred payment may be available.

• If a known extra amount is contingent on a future event, the LBTT return is completed as if that amount will be payable.
• If the future-linked amount cannot yet be worked out, the return should include a reasonable estimate alongside any fixed price.
• The full chargeable consideration entered on the return includes both the fixed amount and any contingent or estimated amount.
• Deferred payment is not automatic; it may be available in some cases, but not where the consideration is already ascertainable and only a best estimate is needed.
• When the contingency ends or the final amount becomes known, further action or a later return may be required.
• A key practical issue is correctly classifying the payment term in the contract, as similar-looking clauses can be treated differently for LBTT.

Scroll down for the full analysis.

LBTT on contingent, uncertain or unascertained consideration

This page explains how Land and Buildings Transaction Tax (LBTT) works when the price for land or buildings is not fully fixed at the effective date of the transaction. This matters where part of the consideration depends on future events, such as planning permission, future turnover, later valuations, or other contractual triggers. The key issue is what amount must be entered on the LBTT return and when tax may be payable before the final figure is known.

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 price actually agreed. The difficulty arises where some of the price is linked to future events.

The legislation and Revenue Scotland guidance distinguish between three related situations:

• Contingent consideration: an amount is payable only if an uncertain future event happens, or stops being payable if an uncertain future event happens.
• Uncertain consideration: the amount will depend on uncertain future events.
• Unascertained consideration: the amount will depend on future events, even though those events themselves may be certain to happen.

These distinctions matter because the return is completed differently depending on which category applies, and the availability of deferred payment is not the same in every case.

What the official source says

Revenue Scotland says that where consideration is contingent and the amount is known, the LBTT 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. In other words, if a known additional sum might become payable depending on a future event, the return is made as if that sum will be payable.

For contingent consideration, the full chargeable consideration must be entered in the return. That includes both:

• the non-contingent amount, and
• the contingent amount.

Revenue Scotland also says that where consideration is uncertain or unascertained because it depends on future events, the return should include a reasonable estimate of that amount. Again, the full chargeable consideration entered in the return should include both the fixed amount and the estimated future-dependent amount.

The guidance adds an important distinction. If 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. Revenue Scotland says this is different from unascertainable consideration.

The return asks whether any part of the consideration depends on future events. If the answer is yes, the return then asks whether an application has been made to pay on a deferred basis. Revenue Scotland says deferral may be possible for contingent amounts and for uncertain amounts if the relevant criteria are met.

Finally, where a contingency later ceases, or the consideration later becomes ascertained, Revenue Scotland directs the reader to its separate guidance on what return is then required.

What this means in practice

The practical starting point is that LBTT does not always wait until every part of the price is finally known. A buyer may need to include an amount in the return, and potentially pay tax on it, even though the future event has not yet happened or the final amount has not yet been worked out.

There are two broad practical patterns:

• If the future-linked amount is contingent but already quantified, include that full amount on the assumption it will become payable.
• If the future-linked amount cannot yet be fixed because it depends on future events, include a reasonable estimate.

This can produce a tax charge based on an amount that may later turn out to be too high or too low. That is why the later position, when the contingency ends or the amount becomes known, also matters.

The guidance also shows that deferred payment is not automatic. The return asks about deferral, but whether it is available depends on separate criteria in Revenue Scotland’s deferral guidance. The source material does not set out those criteria in detail, so the key point here is simply that deferral may be available in some cases, but not in all.

How to analyse it

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

• Is any part of the consideration linked to a future event?
• If yes, is the issue whether the amount becomes payable at all, or whether the amount itself cannot yet be fixed?
• If the amount is contingent, is the contingent sum already known?
• If the amount is uncertain or unascertained, what is the most reasonable estimate at the effective date?
• Is the consideration actually ascertainable now, even if not finally settled? If it is, Revenue Scotland says the return should use a best estimate and deferral cannot be sought.
• Should the return answer “yes” to the question about consideration depending on future events?
• Is there a basis for applying to pay on a deferred basis under the separate deferral guidance?
• What process will be needed later if the contingency falls away or the amount becomes known?

It is important to focus on the legal character of the payment term in the contract. A clause may look uncertain in everyday language, but for LBTT purposes the real question is whether the amount is contingent, uncertain, unascertained, or already ascertainable.

Example

Illustration: A buyer purchases land for a fixed sum of £500,000, plus an additional £100,000 if planning permission is granted within three years.

If that additional £100,000 is contingent consideration and the amount is known, Revenue Scotland’s guidance says the return is completed on the assumption that the contingency is resolved so that the amount is payable. The total consideration entered on the return would therefore include both the £500,000 fixed element and the £100,000 contingent element.

By contrast, imagine the contract says the buyer must pay an additional amount based on future turnover from a development, but the figure cannot yet be calculated. In that type of case, the return should include a reasonable estimate of that future-dependent amount, together with the fixed price.

Why this can be difficult in practice

The hardest issue is often classification. The labels contingent, uncertain, unascertained, and ascertainable are similar, but they do not mean the same thing.

One difficulty is that a contract may contain a future payment mechanism that is partly fixed and partly variable. Another is that the amount may be capable of estimation even though it is not yet finally known. Revenue Scotland’s guidance makes clear that ascertainable consideration is treated differently from unascertainable consideration, particularly on deferral, but the line between them may depend on the drafting and the facts.

There is also judgement involved in producing a reasonable estimate. The source material does not prescribe a formula. That means the estimate must be grounded in the contract and the facts known at the effective date.

A further practical difficulty is timing. The return must be filed based on the position at the relevant time, but the tax consequences may later need to be revisited when the contingency ends or the amount is eventually ascertained.

Key takeaways

• If part of the price depends on future events, it still needs to be addressed in the LBTT return.
• Known contingent amounts are returned on the assumption they will be payable; uncertain or unascertained amounts are returned using a reasonable estimate.
• Deferral may be possible in some cases, but not all, and later action may be needed when the contingency ends or the amount becomes known.

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

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