Where the chargeable consideration for a land transaction is in the form of an annuity, which is:
- payable for life;
- in perpetuity (that is, forever);
- for an indefinite period; or
- for a period which exceeds twelve years,
the chargeable consideration is a single payment based on 12 years’ annuity payments.
Where the payments vary, the 12 highest annual payments (from the effective date of the transaction) are to be used to calculate the chargeable consideration.
No account is to be taken of any adjustment of the amount payable in line with the retail prices index, the consumer prices index or any other similar index.
Where necessary, the rules for contingent consideration and uncertain or unascertained consideration (see LBTT2005) will apply to determine the amount of the payment.
Where some or all of the chargeable consideration to be paid is contingent on an uncertain future event, then the amount of consideration used in the LBTT return is determined on the assumption that the outcome of the contingency will result in the consideration being paid or, as the case may be, not ceasing to be payable.
Where some or all of the chargeable consideration to be paid is uncertain or unascertained because it depends on uncertain future events, then a reasonable estimate of the amount of consideration should be provided in the LBTT return.
LBTT(S)A 2013 sections 18 and 19
However, where the chargeable consideration for a land transaction is in the form of an annuity, then payment of LBTT cannot be deferred or an adjustment made of the amount paid at a later date. No adjustment to the amount payable can therefore be made where a contingency ceases or consideration is ascertained.