Stamp duty where part of the price depends on planning permission
Planning-linked payments and SDLT
An extra sum due only if planning permission is obtained can still be included when SDLT is worked out.
- HMRC’s example treats £10 million plus £5 million as £15 million.
- The buyer may be able to apply to defer part of the tax.
- Contract wording and payment timing matter.
Scroll down for the full analysis.
Read the original guidance here:
Stamp duty where part of the price depends on planning permission
Stamp duty where part of the price depends on planning permission
If a contract requires an extra payment when the buyer obtains planning permission, you may still have to base stamp duty on that payment from day one. Do not wait to see whether the buyer obtains permission.
What this rule is about
Some land deals set a fixed price but also require a later amount if planning permission, sales, or another future event occurs under the contract. People often call this an overage payment.
For SDLT, do not simply ask what has left your bank account. Ask what you have agreed to pay for the land.
What the official source says
HMRC’s manual illustrates a land sale for £10 million. Under its example, the buyer must pay a further £5 million if it obtains planning permission within five years after the land sale. That event remains uncertain.
- Planning permission is an uncertain future event.
- The extra £5 million is treated as payable for SDLT.
- HMRC therefore treats the total amount as £15 million.
What this means in practice
The SDLT calculation starts with both amounts, rather than only the £10 million paid at the sale. That can create a tax cost before anyone knows the planning outcome.
- Read every clause that may increase the price.
- Do not ignore a payment because it may never arise.
- Keep the contract wording with your SDLT records.
How to analyse it
Start by identifying every condition that must be met before the extra amount becomes due, including any requirement for planning permission, sales, or another future event. Then check when it could become due.
- Is there a fixed price for the land?
- Is there an extra payment?
- Does that payment depend on a future event?
- Could the payment fall due more than six months after the deal date?
Example
Pat’s company buys a plot for £10 million. Under the contract, it must pay another £5 million if it gains planning permission within five years. Following HMRC’s example, Pat’s company calculates SDLT using £15 million, even though it has not yet paid the extra £5 million.
Why this can be difficult in practice
Contract labels do not decide the result. What matters is what the clause actually requires.
- A payment may be conditional even if the contract calls it a bonus.
- A payment date and a payment condition are different things.
- A deferral application may be possible, but it is not automatic.
Key takeaways
- Planning-linked payments can count from the start.
- HMRC’s example uses the full £15 million.
- Check whether a payment deferral application is available.
Technical analysis
For advisers, and for anyone who wants to check the law behind this page. You do not need this section to understand the guidance above.
Legislation
- FA 2003 section 51 — contingent amount treated as payable for SDLT; meaning of contingent and uncertain payment terms
- FA 2003 section 90 — when a buyer can seek payment deferral; limits on a deferral application’s effect
Official guidance
The pages below are HMRC’s guidance. Guidance is not law. It sets out how HMRC reads the legislation, and it is not binding on you, on a tribunal or on a court. Where guidance and the legislation differ, the legislation wins. HMRC can also change or withdraw guidance, and it may not cover your facts.
Where this is not settled
- The manual page heading refers to FA 2003 s.51(2), but its planning-permission example is a contingent-payment example under s.51(1).
- Current legislation must be checked for a transaction after 17 November 2025.
- The availability and effect of a deferral application depend on the contract terms and timing of the possible payment.
Evidence you would need
This kind of case is decided on the facts of the individual property. These are the records that usually settle it, and the ones an adviser would ask you for.
- The signed contract and any side agreements
- The exact trigger for the extra payment
- The date by which planning permission must be obtained
- The dates on which any extra amount may become payable
Explore this with an AI
Readers often want to test their own situation. Copy the prompt below into ChatGPT, Claude or Gemini. It hands the model the actual legislation for this page rather than letting it answer from memory, and tells it to be explicit about what is uncertain. What comes back is information, not advice – check it against the links above.
I am researching UK Stamp Duty Land Tax (SDLT), which applies in England and Northern Ireland. MY QUESTION Stamp duty where part of the price depends on planning permission [Replace this with your own situation: what you are buying, the price, the dates, who the buyer is, and what you plan to do with the property.] THE LAW THIS TURNS ON - FA 2003 section 51 - contingent amount treated as payable for SDLT https://www.legislation.gov.uk/ukpga/2003/14/section/51/2025-11-17 - FA 2003 section 51 - meaning of contingent and uncertain payment terms https://www.legislation.gov.uk/ukpga/2003/14/section/51/2025-11-17 - FA 2003 section 90 - when a buyer can seek payment deferral https://www.legislation.gov.uk/ukpga/2003/14/section/90/2025-11-17 - FA 2003 section 90 - limits on a deferral application's effect https://www.legislation.gov.uk/ukpga/2003/14/section/90/2025-11-17 Guidance page from HMRC on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm05010a HOW I WANT YOU TO ANSWER 1. Work from the legislation above. Read it before answering. Guidance from HMRC is its view of the law, not the law, and does not bind a tribunal or a court. 2. Tell me what the rule actually requires, in plain English. 3. Tell me which facts decide the answer, and which facts would change it. 4. Tell me what evidence I would need to support the position. 5. Be explicit about anything unsettled or fact-sensitive. Do not guess. 6. Your training data has a cutoff and SDLT rates and reliefs change at fiscal events. Say so if you are not sure the law is current. POINTS ALREADY KNOWN TO BE UNCERTAIN ON THIS TOPIC - The manual page heading refers to FA 2003 s.51(2), but its planning-permission example is a contingent-payment example under s.51(1). - Current legislation must be checked for a transaction after 17 November 2025. - The availability and effect of a deferral application depend on the contract terms and timing of the possible payment. Do not give me a conclusion you cannot support from the provisions above.
Legislation links show Finance Act 2003 as it stood on 2025-11-17. The law may have changed since, and the rules that apply are those in force on the date of your transaction. The official guidance this page is based on is here.
This page was last updated on 31 August 2026
Useful article? You may find it helpful to read the original guidance here: Stamp duty where part of the price depends on planning permission
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