Contingent, uncertain or unascertained consideration

Worked example for LBTT2005 Contingent, uncertain or unascertained consideration.


A contracts with B to buy a plot of land for £10m with an additional £5m payable contingent on A being successful in obtaining planning permission to build an industrial park on the land within three years.

The chargeable consideration for LBTT is £15m.

A chooses not to make an application to defer payment of tax, and pays LBTT on the £15m total contingent purchase price.

In the event, three years pass but A is unsuccessful in the planning application so the £5m is not payable.

A must make a LBTT return now that the contingency has ceased, and must do so within 30 days of the contingency ceasing. A can also make a claim for repayment of LBTT on £5m. Interest will be payable to A on this £5m.

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