Guidance on LBTT Returns for Contingent or Uncertain Consideration Events

LBTT when contingent or uncertain consideration becomes known later

Where the price for a land transaction was not fully fixed at the effective date, the LBTT position may need to be updated when the missing amount later becomes clear or a contingency is resolved. If that later event means more tax is due, or the transaction becomes notifiable, the buyer may need to file a further return within 30 days. If it means too much tax was paid, the buyer usually seeks a repayment instead.

• These rules apply where consideration was contingent, uncertain or unascertained at the start of the transaction.
• A further LBTT return is required if the later event makes the transaction notifiable, creates a tax charge where none arose before, or increases the LBTT due.
• The extra tax is calculated using the LBTT rates and bands in force on the original effective date, not the later date when the amount becomes known.
• When making the later return, it should be linked to the original return, showing the total consideration now known, but only the additional unpaid tax in the tax field.
• If the later event reduces the tax due, the buyer should claim repayment by amending the original return within 12 months, or otherwise by a section 107 claim within the five-year limit.
• In practice, care is needed to identify the exact date of the later event and to distinguish an original contingent price term from a later renegotiation of the deal.

Scroll down for the full analysis.

LBTT when contingent or uncertain consideration later becomes known

This page explains what happens for Land and Buildings Transaction Tax when the price for a land transaction was not fully fixed at the start, and later becomes clear. The key point is that a further LBTT return may be required if the later event means the transaction becomes notifiable or more tax is due. In some cases, the opposite happens and the buyer may instead be entitled to a repayment.

What this rule is about

Not every land deal has a final, fixed price on the effective date of the transaction. Some contracts include:

• contingent consideration, where an extra amount is payable only if a future event happens
• uncertain consideration, where the amount is not yet certain
• unascertained consideration, where the amount has not yet been worked out

LBTT still needs to deal with these transactions. The tax position may need to be revisited later, once the contingency is resolved or the amount becomes known.

What the official source says

Revenue Scotland says there are two relevant kinds of later event:

• for contingent consideration, the contingency occurs, or it becomes clear that it will not occur
• for uncertain or unascertained consideration, the amount becomes ascertained

If that later event means that:

• the transaction becomes notifiable when it was not notifiable before, or
• additional LBTT becomes payable, or
• LBTT becomes payable when none was payable before,

a further return must be made to Revenue Scotland within 30 days of the event. For that further return, the date of the event is treated as the relevant date.

The tax on that further return is not recalculated using rates and bands in force at the later event date. Instead, it is calculated using the rates and bands that applied at the effective date of the original transaction.

When filing the later return, Revenue Scotland says the return should be linked to the earlier return. In the total consideration field, the buyer should include the amount now actually known. That means the original non-contingent amount plus the further amount that has now become known.

The guidance also says that, in the calculation section of the return, the total tax payable should be amended so that it shows only the additional amount now due and not already paid.

If the later event means less tax is payable, the route is different. The buyer does not make a further return for that purpose. Instead, the buyer makes a repayment claim. If the event happens within the 12-month amendment window, the claim must be made by amending the LBTT return. After that window has closed, the claim must be made under section 107 of the Revenue Scotland and Tax Powers Act 2014, and no later than five years after the date the original return was required to be made.

What this means in practice

The practical question is whether the later event increases the tax position or reduces it.

If the later event increases the amount properly chargeable to LBTT, the buyer may need to file a further return within 30 days. This can happen where an earn-out, overage, deferred price adjustment, or similar amount becomes payable or becomes quantifiable.

If the later event reduces the amount properly chargeable, the buyer is looking at a repayment mechanism instead. That is not dealt with by filing a further return for extra tax. It is dealt with either by amending the original return, if still in time, or by making a statutory claim.

The guidance also matters for timing. Even though the later event triggers the filing obligation, the tax rates and bands are tied back to the original effective date. So a later change in LBTT rates does not alter the rate structure used for this calculation.

There are also practical filing points. Revenue Scotland expects the later return to be linked to the original return, and for the original return reference to be included as a linked transaction entry. That is an administrative step to connect the two filings properly.

How to analyse it

A sensible way to approach the issue is:

1. Identify whether the original transaction involved contingent, uncertain, or unascertained consideration.
2. Identify the later event. Has the contingency happened, failed, or become impossible? Has the amount now become ascertainable?
3. Ask whether that later event changes the LBTT outcome. In particular:
   • does the transaction now become notifiable?
   • is more tax now due?
   • was no tax due before, but tax is due now?
   • or does the event mean less tax was due than originally paid?
4. If more tax is due, consider whether a further return must be filed within 30 days of the event.
5. Calculate the tax by using the rates and bands from the original effective date, not the later event date.
6. When completing the later return, include the total consideration now known, but ensure the tax payable field reflects only the additional unpaid amount now becoming due.
7. If less tax is due, check whether the 12-month amendment window is still open. If it is, amend the original return. If it is not, consider a section 107 claim and the five-year time limit.
8. Keep records showing the original terms, the later event, when it occurred, and how the revised tax position was calculated.

Example

Suppose a buyer acquires land for a fixed amount plus an additional payment if planning permission is obtained within three years.

If the planning condition is later satisfied and that means more LBTT is due than was previously paid, the buyer must make a further LBTT return within 30 days of the planning event. The tax is worked out using the LBTT rates and bands that applied on the original effective date of the purchase.

If instead the planning condition fails and the additional amount will never be payable, the buyer does not make a further return simply to show that the contingent amount has fallen away. The issue is whether tax was overpaid. If it was, the buyer may claim repayment. If the amendment window has already closed, the claim must be made under section 107 of the 2014 Act.

This is the outcome shown in Revenue Scotland’s example, where a buyer paid LBTT on a total price including a known contingent amount, the contingency later failed, and the buyer had to claim repayment rather than file a further return.

Why this can be difficult in practice

The difficult part is often deciding exactly when the relevant event has occurred. For contingent consideration, the trigger is not always a single obvious date. It may be when a contractual condition is formally satisfied, when it becomes legally impossible to satisfy it, or when it otherwise becomes clear that payment will or will not arise. The contract and surrounding facts matter.

Another difficulty is distinguishing between:

• a price term that was always contingent or unascertained, and
• a later renegotiation or variation of the bargain

This page deals with the former. It does not set out wider rules on all contract variations.

There can also be confusion over the return entries. Revenue Scotland’s guidance says the total consideration field should show the amount now actually known, but the tax payable field should show only the additional amount now due and unpaid. That is an administrative distinction, not a contradiction.

Finally, buyers sometimes assume that if the later event reduces the price, a further return must always be filed. The guidance points the other way. A reduction in tax is dealt with through amendment or repayment claim procedures, subject to the time limits.

Key takeaways

• If contingent, uncertain, or unascertained consideration later becomes known and more LBTT is due, a further return may be required within 30 days of the event.
• The tax on that further return uses the rates and bands from the original effective date, not the later event date.
• If the later event means less tax is due, the buyer normally seeks repayment by amending the return or making a section 107 claim, rather than filing a further return for extra tax.

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 Returns for Contingent or Uncertain Consideration Events

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