This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Capital Gains Manual

Deferred consideration: shares and securities: example


If the criteria (e.g. profit targets) for an earn-out payment are not met, the vendor might not receive any deferred consideration.  This will result in an allowable loss on the disposal of the right to receive unascertainable deferred consideration - the `notional security’ for TCGA92/S138A, see the example in CG58095.  A loss arising in a later year may not be carried back to set against gains of an earlier year (except on death, see [CG30430](

TCGA92/Ss279A to 279D allow losses on disposals of rights to receive unascertainable deferred consideration to be treated as if they arose in a year before the disposal occurred in certain circumstance (see CG15080 onwards).  But section 279B(6) prevents those provisions from applying to earn-out rights that are assumed to be securities by section 138A.