LBTT Guidance: Items Excluded from Chargeable Consideration in Land Transactions

LBTT: Items Not Included in Chargeable Consideration

When working out LBTT, the full purchase price is not always taxed if part of it is genuinely for items other than the land. Separate moveable or intangible assets may be left out, but only where the amount deducted is based on a fair market value or, in a business sale, a just and reasonable allocation.

• LBTT applies to the consideration for the land transaction, not automatically to every item included in the overall deal price.
• Moveable items sold with a property, such as carpets or freestanding furniture, may be excluded if they are genuinely separate from the land and valued fairly.
• Fixtures and fittings normally remain part of the chargeable consideration, even if they are listed separately in the contract.
• In business sales, amounts attributed to stock, plant, machinery, or goodwill may be excluded, but the allocation must be just and reasonable.
• It is important to identify exactly what is being sold, separate land assets from non-land assets, and keep evidence supporting the valuation used.
• Unrealistic or inflated values create a risk that the LBTT calculation will be challenged.

Scroll down for the full analysis.

LBTT: What is not included in chargeable consideration

This page explains an important point in Land and Buildings Transaction Tax: not everything paid as part of a purchase is necessarily taxed as consideration for the land. If part of the price is really for items outside the land transaction, that part may be left out when calculating LBTT. The key is that any amount taken out must reflect a fair and supportable value.

What this rule is about

LBTT is charged on the chargeable consideration for a land transaction. In simple terms, that means the value given for the land interest being acquired. In some transactions, especially house sales and business sales, the overall price paid covers more than just the land.

Common examples include moveable items sold with a property, or assets sold with a business that are not part of the land itself. The legal question is whether part of the agreed price relates to something other than the chargeable interest in land. If it does, that part is not chargeable consideration for LBTT purposes.

This matters because the amount subject to LBTT may be lower than the headline purchase price. But the reduction must be based on a genuine and fair valuation. It is not enough simply to label part of the price as being for separate items.

What the official source says

The official guidance says that where the purchase price includes payment for items that are not part of the chargeable consideration, those items must be valued at a rate reflecting their fair market value. That value is then deducted from the total price to arrive at the chargeable consideration for LBTT.

The guidance gives the example of carpets sold with a home. If carpets are included, buyer and seller must agree a fair price that reflects their age and quality. That agreed amount is then subtracted from the total paid.

The guidance also makes an important distinction between items that are outside the chargeable consideration and items that are part of it. It states that fixtures and fittings do form part of the chargeable consideration. So a buyer cannot deduct an amount simply because the contract lists fixtures and fittings separately if, in law, they are part of the land transaction.

For business sales, the same approach applies to other moveable or intangible assets, such as plant and machinery, stock in trade, or goodwill. If those are included in the overall deal, the part of the price allocated to them must be a just and reasonable allocation.

The source also points to separate rules dealing with specific situations, including partitions, failed exemptions, indemnities, and cases where the buyer bears certain tax liabilities. Those are distinct issues and are not the same as valuing non-land items sold alongside the property.

What this means in practice

The practical effect is that you should look beyond the headline price in the contract and ask what is actually being bought.

If a house is sold with genuinely separate moveable items, such as carpets, curtains, or freestanding furniture, the value of those items may be excluded from LBTT if the valuation is fair. But if the item is a fixture or fitting that forms part of the property, its value stays within the chargeable consideration.

In a business purchase, this issue often matters more. A buyer may acquire land and buildings together with stock, machinery, and goodwill. LBTT applies to the land element, not to everything else in the business package. A sensible and supportable allocation is therefore needed.

In practice, this means:

• identify which assets are part of the land transaction and which are not;
• value any non-land items on a fair market basis;
• make sure the allocation is just and reasonable, especially in a business sale;
• deduct only that supportable amount from the total price when calculating LBTT.

An unrealistic allocation creates risk. If too much of the price is attributed to non-chargeable items, the tax calculation may be challenged.

How to analyse it

A sensible way to approach the issue is to work through the transaction in stages.

First, identify everything included in the sale. Do not assume the entire price is for land just because there is one contract, and do not assume a separately listed item is automatically outside LBTT.

Second, separate land-related items from non-land items. The source specifically warns that fixtures and fittings form part of the chargeable consideration, so they are not deducted simply because they are listed separately. By contrast, moveable assets and certain intangible assets may fall outside the LBTT chargeable amount.

Third, ask what a fair market value would be for the non-chargeable items. The guidance uses that standard for household items and says the allocation for business assets must be just and reasonable. The valuation should reflect the real condition and quality of the items, not an inflated figure chosen to reduce tax.

Fourth, keep evidence that explains the allocation. The source does not set out documentation requirements, but in practice the figures should be capable of being justified from the facts of the transaction.

Questions to ask include:

• What exactly is being sold with the property?
• Are those items part of the land, or are they separate moveable or intangible assets?
• Has any value been attributed to those separate assets?
• Does that value reflect fair market value?
• In a business sale, is the overall allocation just and reasonable across all assets?

Example

Illustration: A buyer agrees to pay a single price for a house and certain contents. The contents include carpets that are genuinely separate moveable items. The buyer and seller agree a value for those carpets based on their age and condition. That fair value is deducted from the total price, and LBTT is calculated on the remainder.

By contrast, if part of the same price is said to be for fixtures and fittings that form part of the property, that amount would not be deducted on the basis described in this guidance.

Illustration: A buyer acquires trading premises together with stock, plant and machinery, and goodwill. LBTT is concerned with the consideration for the land transaction. The portion of the overall price allocated to stock, machinery, and goodwill may be excluded, but only if the allocation is just and reasonable.

Why this can be difficult in practice

The main difficulty is classification. The source draws a line between items outside the chargeable consideration and fixtures and fittings that remain within it. That line can be easy in some cases and less obvious in others.

Another difficulty is valuation. The guidance requires fair market value, and in business sales a just and reasonable allocation. Those standards involve judgement. If the parties simply choose figures that suit their tax position, without regard to the real value of the assets, the allocation may not be reliable.

There is also a wider risk of confusion between this rule and other rules on what is excluded from chargeable consideration. The source lists several separate topics, such as indemnities and tax liabilities borne by the buyer. Those are different legal issues and should not be mixed up with the valuation of non-land assets sold alongside the property.

Key takeaways

• LBTT is charged on the consideration for the land transaction, not automatically on every item included in the overall deal price.
• Amounts attributed to non-land items can only be excluded if they reflect fair market value, or in a business sale, a just and reasonable allocation.
• Fixtures and fittings are treated differently from separate moveable or intangible assets and generally remain part of the chargeable consideration.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: LBTT Guidance: Items Excluded from Chargeable Consideration in Land Transactions

View all LBTT Guidance Pages Here