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HMRC internal manual

Capital Gains Manual

Land: disposals: consideration due after date of disposal

This section covers disposals of land where some or all of the sale proceeds are not received immediately. It covers all cases in which further receipts in the future are a possibility. It is not limited to cases in which the future receipts are certain to be received.

The tax treatment depends on the nature of the future receipts. In particular, it depends on whether the future receipts are ‘ascertainable’ or ‘unascertainable’ at the date of disposal. For an explanation of these terms, see CG14881.

It will usually be necessary to read the contract for the sale of the land to establish the precise nature of the future receipts. The contract will often have a section titled ‘consideration’ which will set out the relevant details. However many contracts will not be this straightforward, and details of the future receipts may be contained in a later section of the contract. It is necessary to carefully review the main sale and purchase clauses and the definitions section, and to review the whole contract to ensure that it has been correctly analysed.

Valuable consideration can take many forms and may well include things which are not specifically expressed to be, or described as, consideration.