Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 section 19

Contingent consideration

Section 19 explains how to treat consideration for a land transaction when part or all of the payment depends on an uncertain future event.

• Contingent consideration is a payment that either only becomes due if a future uncertain event happens, or stops being due if a future uncertain event happens.
• When calculating the chargeable consideration, you must assume the worst-case scenario for the buyer — that is, that the contingency will result in the consideration being payable.
• If consideration would cease to be payable on the occurrence of an uncertain event, you must assume that event will not occur, meaning the full consideration remains payable.
• This approach ensures tax is calculated on the maximum potential consideration at the outset, with adjustments possible later if circumstances change.