LTT: deferring tax on an uncertain future property payment
Can you defer LTT on a later payment?
Possibly. The payment must depend on an uncertain future event, or have an uncertain amount. A fixed price paid in instalments will not qualify.
- Include the future payment when you first work out LTT.
- Request deferral by the filing date for the return.
- The payment must be due, or possibly due, more than six months later.
- The WRA may approve a lower amount or set conditions.
Scroll down for the full analysis.
Read the original guidance here:
LTT: deferring tax on an uncertain future property payment
If part of your property price depends on something that may happen later, you may be able to delay paying some Land Transaction Tax (LTT). Instalments alone cannot delay stamp duty. A future event must genuinely determine the extra payment, or make it uncertain.
What this rule is about
Some property deals include a later payment. For example, you may agree to pay more if planning permission is granted, or if a development reaches an agreed stage.
That later amount can create a problem. You must still send an LTT return and work out the tax at the start. Yet the event may not happen for months or years.
There are two parts to the legal approach: calculate the tax now, then ask the Welsh Revenue Authority, known as the WRA, to postpone the part linked to the future payment.
What the official source says
For a contingent payment, you work out the return as if the event will happen and the payment will be due. A contingent payment depends on an uncertain future event.
For an uncertain payment, you use a reasonable estimate. Its amount or value depends on uncertain future events.
- You must submit the LTT return by its filing date.
- You must make the deferral request by that same date.
- You must state the amount of tax you want to defer.
- You must show how you calculated that amount.
- You must explain why the later payment is contingent or uncertain.
- You must explain why it will be paid at a future date.
- At least one possible payment date must be more than six months after the effective date.
- You must propose an expected end date for the deferral period.
- Where that date cannot be predicted, you must state a date five years after the effective date.
- You must give the request in the form required for notices to the WRA.
A payment that is known and fixed, but paid by instalments, does not qualify. That is the part people often get wrong.
Where a request meets the legal conditions, the WRA must accept it, as long as the requested sum does not exceed the permitted amount and the deal is not a tax avoidance arrangement. An arrangement counts as tax avoidance where obtaining a tax advantage is a main purpose and it lacks genuine economic or commercial substance beyond that advantage.
What this means in practice
Your first return must include the possible later payment. You include it when you work out the tax. Deferral may then postpone the part of the tax that relates to that payment.
You cannot defer simply the later payment itself. Instead, defer the difference between the tax on the full deal and the tax that would apply if you removed the qualifying future amount.
- Pay any tax that does not relate to the qualifying future amount as normal.
- Keep the contract, calculations and supporting papers with the request.
- Do not assume a later payment qualifies because it has a distant due date.
- Check whether the payment depends on an event or whether only its timing has changed.
- Read the WRA decision carefully if it approves a smaller sum or adds conditions.
The WRA can approve only the amount it thinks is correct. It can also choose a different end date from the one you proposed and impose conditions, including payments during the deferral period.
Pay the deferred amount by the following day’s end. The period can end earlier than expected if the event happens, fails, or the amount becomes known.
How to analyse it
Start with the payment clause, not the label used in the contract. Calling a sum an “overage payment” or a “deferred payment” does not decide the issue.
- Identify every amount payable after completion.
- Ask whether an uncertain future event decides whether it is payable.
- If it will be payable, ask whether uncertain future events decide its amount.
- Separate a genuinely uncertain payment from a fixed price paid later.
- Check whether at least one possible payment date is more than six months after the effective date.
- Work out the tax on the whole deal using the required assumption or estimate.
- Calculate the difference that relates to the qualifying future amount.
- Choose a realistic expected end date.
- Make the return and request by the filing date.
What actually decides the answer? Look at the words of the agreement and what must happen before the buyer owes the extra sum.
Example
Amira buys land for £500,000. Planning permission within two years triggers her further £100,000 payment. Because the extra sum depends on an uncertain future event, Amira must include it when working out LTT for her first return as if planning permission will be granted.
Because the possible payment may fall more than six months after the effective date, she may ask the WRA to defer the part of the tax linked to the £100,000. Her request must show that calculation and explain the planning condition.
Now change one fact. If Amira must pay the £100,000 in twelve monthly instalments whatever happens, the sum is fixed. The later dates alone do not allow a deferral request.
Why this can be difficult in practice
Contracts often mix several ideas. A clause may set a minimum sum, a variable top-up and several payment dates. Each part needs separate thought.
You might think the tax can wait until you know the final amount. Usually, it cannot. First returns require assumptions or reasonable estimates.
- A fixed sum paid late is different from a sum that depends on an event.
- An estimate must have a reasonable basis, not a hopeful figure.
- The event may end the deferral period sooner than the proposed date.
- A request can fail if it arrives after the filing date.
- The WRA can reject a request connected with a tax avoidance arrangement.
- The WRA can approve less than you asked to defer.
This distinction can affect cash flow sharply. Get the contract and the calculation right before you send the first return.
Key takeaways
- You must calculate LTT now, even where a later payment remains uncertain.
- You may request deferral only for qualifying contingent or uncertain payments.
- Instalments of a fixed price do not qualify.
- Send the return and deferral request by the filing date.
- Pay the deferred amount promptly when the deferral period ends.
Technical analysis
For advisers, and for anyone who wants to check the law behind this page. You do not need this section to understand the guidance above.
Legislation
- LTTA 2017 section 19 — how contingent payments are valued for ltt
- LTTA 2017 section 20 — how uncertain payments are reasonably estimated
- LTTA 2017 section 31 — when a tax avoidance arrangement blocks relief
- LTTA 2017 section 57 — when ltt is normally due with a return
- LTTA 2017 section 58 — requests to defer tax on future payments
- LTTA 2017 section 59 — how to calculate the amount that may wait
- LTTA 2017 section 61 — when deferred tax must be paid after approval
Official guidance
The pages below are the Welsh Revenue Authority’s guidance. Guidance is not law. It sets out how the Welsh Revenue Authority reads the legislation, and it is not binding on you, on a tribunal or on a court. Where guidance and the legislation differ, the legislation wins. the Welsh Revenue Authority can also change or withdraw guidance, and it may not cover your facts.
Where this is not settled
- Whether a payment is contingent, uncertain or simply unpaid under an agreed instalment plan depends on the contract and facts.
- The supplied statute bundle does not state its currency date, so the current wording should be checked for a transaction taking place after the bundle was prepared.
Evidence you would need
This kind of case is decided on the facts of the individual property. These are the records that usually settle it, and the ones an adviser would ask you for.
- The purchase contract and any agreement covering later payments
- A clear explanation of the event or facts that set the later amount
- A calculation showing the tax requested for deferral
- Evidence of when each later payment may become due
- The proposed date when the uncertainty or contingency should end
Explore this with an AI
Readers often want to test their own situation. Copy the prompt below into ChatGPT, Claude or Gemini. It hands the model the actual legislation for this page rather than letting it answer from memory, and tells it to be explicit about what is uncertain. What comes back is information, not advice – check it against the links above.
I am researching Land Transaction Tax (LTT), the tax on property in Wales. It replaced Stamp Duty Land Tax in Wales on 1 April 2018, and SDLT does not apply in Wales. MY QUESTION LTT: deferring tax on an uncertain future property payment [Replace this with your own situation: what you are buying, the price, the dates, who the buyer is, and what you plan to do with the property.] THE LAW THIS TURNS ON - LTTA 2017 section 19 - how contingent payments are valued for ltt https://www.legislation.gov.uk/anaw/2017/1/section/19 - LTTA 2017 section 20 - how uncertain payments are reasonably estimated https://www.legislation.gov.uk/anaw/2017/1/section/20 - LTTA 2017 section 31 - when a tax avoidance arrangement blocks relief https://www.legislation.gov.uk/anaw/2017/1/section/31 - LTTA 2017 section 57 - when ltt is normally due with a return https://www.legislation.gov.uk/anaw/2017/1/section/57 - LTTA 2017 section 58 - requests to defer tax on future payments https://www.legislation.gov.uk/anaw/2017/1/section/58 - LTTA 2017 section 59 - how to calculate the amount that may wait https://www.legislation.gov.uk/anaw/2017/1/section/59 - LTTA 2017 section 61 - when deferred tax must be paid after approval https://www.legislation.gov.uk/anaw/2017/1/section/61 Guidance page from the Welsh Revenue Authority on this topic (guidance, not law): https://www.gov.wales/land-transaction-tax-returns-and-payments-technical-guidance#5577 HOW I WANT YOU TO ANSWER 1. Work from the legislation above. Read it before answering. Guidance from the Welsh Revenue Authority is its view of the law, not the law, and does not bind a tribunal or a court. 2. Tell me what the rule actually requires, in plain English. 3. Tell me which facts decide the answer, and which facts would change it. 4. Tell me what evidence I would need to support the position. 5. Be explicit about anything unsettled or fact-sensitive. Do not guess. 6. Your training data has a cutoff and SDLT rates and reliefs change at fiscal events. Say so if you are not sure the law is current. POINTS ALREADY KNOWN TO BE UNCERTAIN ON THIS TOPIC - Whether a payment is contingent, uncertain or simply unpaid under an agreed instalment plan depends on the contract and facts. - The supplied statute bundle does not state its currency date, so the current wording should be checked for a transaction taking place after the bundle was prepared. Do not give me a conclusion you cannot support from the provisions above.
Legislation links show the Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 as it stood on 2025-11-17. The law may have changed since, and the rules that apply are those in force on the date of your transaction. The official guidance this page is based on is here.
This page was last updated on 3 September 2026
Useful article? You may find it helpful to read the original guidance here: LTT: deferring tax on an uncertain future property payment
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