Jurisdiction(s):
United Kingdom

Key definition

Estate definition

What does Estate mean? In practice, “estate” describes either: (1) the nature and duration of a person’s proprietary interest in land; or (2) the aggregate property of a person, commonly on death or bankruptcy. England & Wales and Northern Ireland: An estate in land denotes the time-based interest, not the land itself. Statute and case law limit legal estates primarily to freehold (fee simple absolute in possession) and leasehold (term of years absolute), with other interests (for example, life interests and beneficial interests under a trust) arising in equity. This concept underpins conveyancing, security, priorities and land registration. Ireland: Under the Land and Conveyancing Law Reform...

Direct tax treatment of overage in UK property transactions: capital v income, Marren v Ingles contingent rights, transactions in land anti-avoidance, and alternative payment structures

Published by a LexisNexis Tax expert

Practice notes

In numerous real estate sales and purchases, the agreed consideration often contains an overage element. There are various ways to structure overage. Its direct tax position turns on the chosen structure and the respective tax profiles of payer and recipient. This Practice Note reviews the main forms of overage and how direct taxes apply to both seller and buyer. Overage payments also affect SDLT and VAT, sometimes strongly enough to dictate the deal structure. Those issues fall outside this Note. For VAT, see Practice Note: VAT treatment of overage; for SDLT, see Practice Note: SDLT chargeable consideration — overage payments. In this Note, income tax references encompass corporation tax on income, and CGT covers both capital gains tax and corporation tax on chargeable gains.

What is overage?

Overage refers to a situation where the seller (usually, but not always, of land) keeps a right to further consideration from the purchaser once completion has occurred and any initial price has been paid. The right retained by the seller...

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Charles Goddard

Rosetta Tax

Charles is a solicitor at Rosetta Tax Limited, which specialises in corporate tax advice to businesses and professional services firms. He has a broad range of tax advisory expertise, having acted for a variety of UK-based and international financial institutions and listed companies. He has particular expertise in the real estate and finance sectors, with a strong focus on the taxation of insolvency and restructuring transactions.Charles was for six years until 2012 a tax partner at Berwin Leighton Paisner LLP. Prior to joining BLP, he spent eight years at Slaughter and May as a trainee and associate in their Tax group. He is recommended by both Chambers and Partners and Legal 500....

Web page updated on 21/05/2026

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