Q&As

What is the VAT treatment of an overage payment where the initial transaction was a transfer of a going concern?

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Published by a LexisNexis Tax expert
Published on: 16 January 2019
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This Q&A assumes that the subject matter of the transaction is land in the UK.

Overage describes the situation in which the seller retains the right to receive from the buyer an additional amount of consideration after the completion of the sale and payment of any initial consideration. This additional payment is generally dependent on the occurrence of certain future events.

For VAT purposes, overage is additional consideration for the sale of the land. It is therefore likely to have the same VAT treatment as the original consideration, unless there is a rule

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United Kingdom
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