The consideration consists of an initial payment of
£350,000 for land and a later payment of £50,000 for each
set of 50 houses for which planning permission is granted. The
purchaser expects to get permission for 200 houses.
Stamp Duty Land Tax is due 30 days after the due date on
£350,000 even if there has been a successful application for
deferral as the normal rules apply to the initial payment which is
not contingent.
The rate of tax is calculated as if the contingency will
happen so as the total consideration will be in excess of
£500,000 the rate of tax due on the £350,000 initial
payment is 4%.
The circumstances are similar to example 1, but the initial
payment is £100,000 and a further £50,000 to be paid for
planning permission received for each set of 50 houses. This means
that if permission were granted for 200 houses as expected the
total consideration would be £300,000 and the rate of tax paid
on the initial payment is 3%.
It transpires that planning permission is granted for 450
houses bringing the total consideration to £550,000.
The rate of tax is now 4% and there will be an adjustment
made to the rate of tax payable at the filing date.
The regulations for deferred payments provide that this
adjustment is made as a purchaser amendment under FA03/SCH10/PARA6
and not a FA03/S80 adjustment where contingency ceases or
consideration is ascertained.
