Commentary on Sections Part 6 – Returns and Payments Section 58 - Deferral requests in cases of contingent or uncertain consideration
74.Section 58 makes provision for buyers to ask WRA to agree to defer payment of LTT where the consideration is contingent or uncertain. WRA must agree to the deferral request if the buyer meets a number of conditions in their request, including; the request is made within the same time limit as the period for filing the return (and that return must also have been made before the filing date), the request specifies the amount of tax to be deferred and provides a calculation of the deferral amount etc. If the request does not conform to the conditions set out in this section WRA must refuse the request, although if it believes that a smaller amount should be deferred WRA can grant a deferral of that smaller amount. Importantly, a deferral request cannot be made if there are any tax avoidance arrangements in relation to the transaction. Tax avoidance arrangements are defined by section 31. When making a request to defer tax under this section, the buyer must state the proposed expected end date of the deferral period. If the buyer is not able to predict a date, the fifth anniversary of the effective date of the transaction will be used as the end date for the deferral period. This will enable WRA to monitor and check whether additional tax is payable in such cases as it will for cases where a date can be predicted. This rule allows for the imposition of a number of different payment dates for different amounts of deferred tax so that, for example, contracts providing for deferred payments related to the provision of works and services can also be agreed.