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HMRC internal manual

Capital Gains Manual

Deferred consideration: Ascertainable but contingent

Payments which are ascertainable but contingent are treated in the same way as all other ascertainable amounts.

The wording of the agreement will link the liability to pay the future amount or amounts with the occurrence or non-occurrence of a particular event.

Examples of ascertainable but contingent payments are

  • the agreement for the sale of a business provides for a consideration of £250,000, of which £200,000 is payable on completion and £50,000 is payable if the profits of the year following the date of disposal exceed £100,000, or
  • the agreement for the sale of a piece of land provides for a consideration of £75,000, of which £50,000 is payable on completion and £25,000 is payable if planning permission is granted within two years of the date of the disposal.

The defining feature of ascertainable deferred consideration is that all of the events which affect the AMOUNT occur before the date of the disposal.