Jurisdiction(s):
United Kingdom

Key definition

Liabilities definition

What does Liabilities mean? In practice, a scheme’s liabilities are what it owes: the future benefit payments (for example, pensions and lump sums) and the scheme’s expenses. They are usually measured as the present value of expected cashflows, determined by an actuary using assumptions on discount rate, longevity, inflation and expenses. Comparing liabilities with the market value of assets gives the funding level: a deficit arises where liabilities exceed assets; a surplus where assets exceed liabilities. “Liabilities” is a descriptive term used across legal, actuarial and accounting contexts rather than a single statutory definition. However, valuation bases are prescribed for particular purposes. In...

UK VAT on non‑monetary consideration in land and property deals: barter, rent‑frees, exchanges, construction and demolition; valuation, tax points, invoicing, options to tax and reverse charge pitfalls

Published by a LexisNexis Tax expert

Practice notes

This Practice Note addresses the VAT treatment of supplies of land and buildings where the consideration is non‑monetary (barter arrangements).

Why does this matter?

Barter dealings can trigger unexpected VAT charges, and may have other unwelcome VAT effects, of which the parties should be mindful. VAT clauses in agreements concerning transactions of this nature may call for careful drafting.

What to look for

The issues arise where the consideration for a supply is not, or not wholly, in money; thus any cash consideration (if any) is liable to be less than one would expect to obtain for such a supply. In commercial settings, arrangements described as gifts, or agreed at a low price or low rent, will usually amount to a barter, whether or not the parties have viewed them that way. Some barter dealings, such as swapping one plot of land for another, are easy to recognise. Other situations are less clear. To assess the position, you may need to break the deal into its component parts, and ask whether one party would do X if the other were not doing Y. Accordingly, the parties should scrutinise each element to identify the real consideration being provided overall.

How much

...

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Web page updated on 22/05/2026

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