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HMRC internal manual

Capital Gains Manual

Land: disposals: unascertainable deferred consideration

The consideration will be unascertainable if the events which establish its amount do not occur until after the date of the disposal.

An example of an unascertainable payment would be where an agreement for the sale of land provides for consideration of a capital sum payable in three annual instalments to be calculated by reference to the tonnage of land fill dumped on that site in the three years following the date of the contract.

The presence of a maximum amount to be paid does not imply that the consideration is ascertainable in that maximum figure.

An example of such a case would be where the agreement for the sale of land provides for an immediate payment for £250,000 plus a further payment of half the profit made by the purchaser on a subsequent sale of the land subject to a maximum further payment of £100,000.