Q&As

Can a buyer apply to defer SDLT under the Finance Act 2003, s 90 when it inherits a pre-existing overage? Is the position affected by the original buyer failing to make a deferment application at the point the overage was created?

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Published on LexisPSL on 26/09/2018

The following Tax Q&A provides comprehensive and up to date legal information covering:

  • Can a buyer apply to defer SDLT under the Finance Act 2003, s 90 when it inherits a pre-existing overage? Is the position affected by the original buyer failing to make a deferment application at the point the overage was created?

Can a buyer apply to defer SDLT under the Finance Act 2003, s 90 when it inherits a pre-existing overage? Is the position affected by the original buyer failing to make a deferment application at the point the overage was created?

This Q&A refers to an application to defer stamp duty land tax (SDLT) on contingent or uncertain consideration under section 90 of the Finance Act 2003 (FA 2003).

It is understood that the seller (also the original buyer) has an obligation to pay an overage to the person that sold the land to it (the original seller). The seller will pass on its obligation (to pay the overage) to the buyer and the buyer may have to pay an overage to the original seller. The precise mechanics of how this obligation is passed to the buyer will affect the SDLT analysis.

Under FA 2003, s 51 where an amount of consideration is contingent on an uncertain future event the taxpayer is obliged to pay SDLT on the assumption that the event occurs. Where the amount is uncertain or unascertained SDLT is paid on the basis of a reasonable estimate.

FA 2003, s 51 is subject to the provisions of FA 2003, ss 80 and 90.

FA 2003, s 80 obliges the purchaser to make a further return or claim when either (a) the contingency occurs (or it becomes

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