HMRC SDLT: SDLTM22510 – Reliefs: Compliance with planning obligations
Reliefs: Compliance with Planning Obligations
This section of the HMRC internal manual provides guidance on reliefs related to compliance with planning obligations. It outlines the principles and concepts necessary for understanding the application of reliefs in the context of planning obligations.
- Explains the criteria for qualifying for reliefs.
- Details the procedures for applying reliefs.
- Provides examples of planning obligations that may qualify for reliefs.
- Clarifies the roles and responsibilities of relevant parties.
Read the original guidance here:
HMRC SDLT: SDLTM22510 – Reliefs: Compliance with planning obligations
Relief from Stamp Duty Land Tax for Planning Obligations
Understanding Planning Obligations
When a buyer completes a land transaction to meet a planning obligation or to change a planning obligation, they may be able to get relief from Stamp Duty Land Tax (SDLT). This relief applies when specific conditions are met and mainly benefits certain public authorities by freeing them from the obligation to pay this tax.
What is a Planning Obligation?
A planning obligation is a legal agreement that is usually associated with a planning permission. These obligations typically ensure that developers meet certain conditions before proceeding with their projects, which can include providing community benefits or adhering to specific regulations. The definitions of a planning obligation vary depending on the region within the UK:
– In England:
– It refers to obligations defined under Section 106 of the Town and Country Planning Act 1990. This includes agreements made as per subsection 9 of that section.
– Additionally, these obligations can be defined under Section 299A of the Town and Country Planning Act 1990, specifically for agreements made in compliance with subsection 2.
– In Northern Ireland:
– The planning agreement is defined under Article 40 of the Planning (Northern Ireland) Order 1991, which includes agreements entered into under paragraph 10 of that Article.
Modifications to Planning Obligations
A modification to a planning obligation involves changing the terms or conditions outlined in the original obligation. Similar to planning obligations, modifications are defined differently based on location:
– In England:
– For modifications, the relevant reference is Section 106A(1) of the Town and Country Planning Act 1990.
– In Northern Ireland:
– A modification is defined under Article 40A(1) of the Planning (Northern Ireland) Order 1991.
Eligibility for Relief from Stamp Duty Land Tax
To be eligible for the SDLT relief, the following criteria must be satisfied:
– The land transaction must be to comply with a planning obligation or a modification of one.
– The transaction must involve bodies defined as public authorities.
This means that not all buyers can claim this relief; it is specifically designed for public authorities that receive planning consents and must undertake transactions relating to planning obligations.
Examples of Planning Obligations and Modifications
To illustrate how these concepts work, consider the following examples:
– Example 1: A local council might grant planning permission for a new housing development. As part of the planning permission, the developer must agree to provide public amenities, such as parks or community facilities. This agreement serves as a planning obligation. If the developer sells part of the land to a public authority to meet this obligation, they could claim relief from SDLT on that transaction.
– Example 2: A planning obligation might originally require a developer to construct a certain number of affordable homes. If the developer later negotiates a change to reduce that number due to financial constraints, this change is a modification of the original obligation. If a public authority buys the modified land, they could also take advantage of the SDLT relief.
Public Authorities Defined
Public authorities typically include governmental bodies such as local councils, government departments, and other statutory bodies. These entities often engage with planning obligations as part of their responsibilities in managing land use and community development.
Application Process for SDLT Relief
If a public authority wishes to claim this relief, they must ensure to provide adequate evidence supporting their eligibility during the SDLT submission process. This can include:
– Documenting the planning obligation and its compliance.
– Providing evidence of the transaction details that demonstrate how the obligation relates to the purchase of the property.
It is crucial to maintain thorough records and clearly present the circumstances surrounding the claim to facilitate the review process by HMRC.
Conclusion
This guidance addresses how relief from Stamp Duty Land Tax may be claimed in relation to planning obligations and their modifications. Understanding these concepts and the specific definitions relevant to your location will assist public authorities in navigating transactions related to planning consents and obligations effectively.