Guidance on Deferring Tax for Contingent, Uncertain, and Unascert

When LTT can be deferred for contingent, uncertain or unascertained consideration

Land Transaction Tax may be deferred where part of the purchase price is not fixed on the effective date, but only if that amount is contingent or uncertain. If the amount could already be worked out from existing facts and is merely unascertained, deferral is not allowed.

• Contingent consideration depends on a future event, such as planning permission being granted, and can qualify for deferral.
• Uncertain consideration cannot yet be accurately calculated because it depends on future events, so the buyer must make a reasonable estimate and may be able to defer the tax.
• Unascertained consideration is not enough on its own for deferral if the amount can already be calculated from existing facts but has not yet been finalised.
• A payment can fall into more than one category; if it is uncertain as well as unascertained, deferral may still be available.
• If the amount reported later proves too high or too low, the buyer must correct the position by filing a further return or making a repayment claim.
• Deferral can help cash flow, but separate rules on interest may still apply to the deferred tax.

Scroll down for the full analysis.

When LTT can be deferred for contingent, uncertain or unascertained consideration

This page explains when Land Transaction Tax can be deferred because part of the purchase price is not fixed at the effective date of the transaction. The distinction between contingent, uncertain and unascertained consideration matters because some amounts can qualify for deferral and some cannot.

What this rule is about

Not every land transaction has a simple fixed price. Sometimes the buyer pays an extra amount only if something happens later, such as planning permission being granted. In other cases, an extra payment will be due, but its amount cannot yet be worked out accurately. The LTT rules treat these situations differently.

The key issue is whether the later amount is:

• contingent, meaning it depends on a specified future event happening or not happening,
• uncertain, meaning the amount or value cannot yet be accurately calculated because it depends on uncertain future events, or
• unascertained, meaning it can in principle be worked out, but the calculation has not yet been done.

Under the official guidance, tax on contingent or uncertain consideration can be deferred if the relevant conditions are met. Tax cannot be deferred merely because the amount is unascertained.

What the official source says

The official material draws three separate categories.

For contingent consideration, the buyer must calculate LTT on the basis that the contingent amount will be payable. If the contingency is that an amount will stop being payable if a future event occurs, the buyer must assume that it does not stop being payable.

For uncertain consideration, the buyer must make a reasonable estimate of the final consideration as at the effective date of the transaction. If the buyer considers the relevant future event unlikely, it may be reasonable to ask for a nil deferral.

For unascertained consideration, the amount is treated as ascertainable but not yet calculated. The guidance says tax on an amount that is only unascertained cannot be deferred.

If the amount included in the return later proves too low or too high, and that leads to extra tax or a repayment, the taxpayer must file a further return or make a repayment claim.

The guidance also gives a practical table:

• contingent only: deferrable,
• uncertain and unascertained: deferrable,
• unascertained only: not deferrable,
• contingent and unascertained: deferrable,
• uncertain only: deferrable.

What this means in practice

The starting point is not whether the payment is due later. The real question is why the amount is not fixed yet.

If the extra price depends on a future event, such as planning permission, that is usually contingent. The buyer must generally include it on the basis that it will become payable, but may be able to defer the tax attributable to that amount.

If the payment will be due, but its amount depends on future facts that cannot yet be known, it may be uncertain. In that case, the buyer must make a reasonable estimate at the effective date and may be able to defer the tax on that estimated amount.

If the amount can already be worked out from existing facts, but the figures have not yet been finalised, that is unascertained only. In that case, deferral is not available just because the arithmetic has not yet been completed.

This distinction affects cash flow and compliance:

• a buyer may be able to postpone paying some of the tax where the law allows deferral,
• the return still needs to deal with the later payment correctly at the effective date, and
• if the estimate later turns out to be wrong, the position must be corrected.

The guidance also points buyers to the separate rules on interest for deferred amounts. That matters because deferral does not necessarily mean the deferred tax is cost-free.

How to analyse it

A sensible way to analyse the position is to ask these questions in order.

• Is there an additional amount of consideration that may become payable, or may cease to be payable, depending on a specified future event? If yes, it is likely to be contingent.
• If there is no contingency, is the amount or value still impossible to calculate accurately because it depends on uncertain future events? If yes, it may be uncertain.
• If the amount could be calculated from existing facts, but the figures have not yet been compiled or confirmed, it is likely to be unascertained only.
• If the amount is uncertain, what is a reasonable estimate at the effective date?
• If the buyer thinks the relevant future event is unlikely, is there a basis for requesting a nil deferral under the guidance?
• If deferral is available, has the buyer considered the separate guidance on interest on deferred tax?
• If the estimate later proves wrong, will a further return or repayment claim be needed?

The important practical point is that a single amount can fall into more than one category. An amount can be both unascertained and uncertain. In that case, the fact that it is also uncertain can allow deferral. But if it is merely unascertained, that is not enough.

Example

Suppose a buyer agrees to pay £10 million for land, plus an extra sum in five years if planning permission for housing is obtained. The extra sum will be 20% of the increase in the land’s value.

That extra payment is not just unascertained. It is also uncertain, because its amount depends on future events and future valuation. On the official guidance, the buyer may apply to defer the tax on that amount, using a reasonable estimate of the uncertain consideration.

By contrast, if the contract says the buyer must also pay 10% of its profits from the previous financial year once the accounts are published, the amount may not be uncertain in this sense. It is based on past trading activity, so the relevant facts already exist. It is unascertained because the figure has not yet been calculated, but the guidance says deferral is not available for an amount that is only unascertained.

Why this can be difficult in practice

The hardest part is often deciding whether an amount is genuinely uncertain or merely unascertained.

That line can be fine. A payment may be commercially described as “to be calculated later”, but that does not answer the legal question. You need to ask whether the amount depends on future events that are genuinely uncertain, or whether all the relevant facts already exist and only the calculation remains to be done.

Another difficulty is estimating uncertain consideration. The guidance requires a reasonable estimate as at the effective date. That is a factual judgement. The buyer should focus on what could reasonably be known at that time, not on what later turned out to happen.

The guidance also says that where the buyer believes the chance of the uncertain future event is low, a nil deferral may be reasonable. That does not mean nil will always be accepted whenever the buyer says an event is unlikely. The position depends on the facts and on whether that view is objectively reasonable.

Finally, even where deferral is available, the transaction may need to be revisited later. If the amount ultimately payable differs from what was returned or estimated, the buyer may need to file a further return or claim a repayment.

Key takeaways

• Deferral is available for contingent consideration and for uncertain consideration, but not for an amount that is only unascertained.
• The key distinction is whether the amount depends on uncertain future events, or whether it can already be worked out from existing facts.
• If the figure later turns out to be wrong, the LTT position must be corrected by a further return or repayment claim.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Guidance on Deferring Tax for Contingent, Uncertain, and Unascert

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