Selling & Buying properties – Delayed Completion – Tax Planning Strategy


Louise Misiewicz

Tax Consultant

19th September 2013

Posted by Simon Misiewicz on 23rd August 2013

Are you looking to buy properties but wish to delay tax for the seller?

Are you looking to sell properties but wish to delay CGT?

Delayed completions

There may be times when people agree to sell a property sometime in the future. From the perspective of HMRC CGT applies upon the agreement of sale rather than when the sale took place (1).

Quick Tip: If you are looking to spread the cost of CGT to ensure you utilise annual exceptions it is possible to use delayed completions and put in conditions that clearly state that conditions are to be met before a sale is legally binding.


It would, for example, be possible for a hotelier to make a booking with a tour operator conditionally upon the next Olympic Games being held in London. Then, until it had been decided that the next Olympic Games were going to be held in London, there would be no effective contract: the whole contract would be conditional, the whole liabilities and duties between the parties would only arise when the condition was fulfilled.

A seller that remains in the property until the “Completion date” can reduce the sales value of the property by way of making rental payments, which the owners receives as an income. This helps the seller reduce the value for CGT purposes (2) (3).

The payments will be capital where the sale agreement specifies a CAPITAL SUM. This will be the case even if the actual amount cannot immediately be determined. An example of such capital payments would be where the agreement provides for payment of amounts EQUAL TO a specified proportion of the profits for a given number of years (4).

Delayed completion using instalments

Where the consideration for an asset is payable by instalments, the vendor may, in certain circumstances, ask to pay the tax due on its disposal by instalments.

This relief is available where the instalments of consideration specified in the contract for sale of the asset begin no earlier than the date of disposal of the asset and extend over a period exceeding 18 months and continue beyond the date on which the tax would otherwise be due and payable.

Where these requirements are satisfied, the calculation of the instalments of tax which the vendor should pay is to be made by an Inspector in accordance with CG14912 (6).

For more information please contact us on 0115 946 1991 or Click Here To Email


(1) CG14270 – Computation: Date Of Disposal: Conditional Contracts

(2 & 3)CG14873 – Deferred Consideration: Not Instalments Of A Capital Sum: Income Or Capital Receipts

(4)CG14875 – Deferred Consideration: Not Instalments Of A Capital Sum: Capital Receipts

(5 & 6)CG14910 – Deferred Consideration: Ascertainable: Payment By Instalments: Conditions And Calculation

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