HMRC SDLT: Eligibility Criteria for Relief: Planning Obligations, Public Authority Purchaser, Five-Year Limit
Conditions for Relief on Planning Obligations
To qualify for relief on a transaction involving planning obligations, three specific conditions must be met. These conditions ensure that the planning obligation is enforceable, involves a public authority as the purchaser, and occurs within a specified timeframe. Meeting these criteria is essential for the transaction to be eligible for relief.
- The planning obligation must be enforceable against the vendor, meaning it can be upheld through legal or other means.
- The purchaser must be a public authority, with lists available for England and Northern Ireland, and HM Treasury can designate additional entities.
- The transaction must occur within five years from the date the planning obligation was initially entered into or last modified.
- The timeframe is based on the latest date of entry or modification of the planning obligation.
- For example, if modified on 25 June 2008, the transaction must be completed by 24 June 2013.
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Read the original guidance here:
HMRC SDLT: Eligibility Criteria for Relief: Planning Obligations, Public Authority Purchaser, Five-Year Limit
Understanding SDLTM22520 – Reliefs: Compliance with Planning Obligations
Eligibility Conditions for Relief
To qualify for relief under SDLTM22520, transactions need to meet three specific conditions. Each condition must be satisfied for the relief to apply.
1. Enforceability Against the Vendor
The first requirement is that there must be a planning obligation that can be enforced against the vendor.
– This means that before the transaction occurs, there needs to be a legally binding planning obligation affecting the vendor.
– The planning obligation must be enforceable, which means it can be acted upon either through court action or other legal means.
– Importantly, it is not necessary for action to have already been taken to enforce this order. What matters is that it is possible to enforce it.
For example, if the vendor is required to adhere to a specific planning obligation relating to land use or development, this obligation needs to be active and enforceable at the time of the transaction.
2. The Purchaser Must Be a Public Authority
The second condition states that the purchaser of the property must be a public authority.
– Public authorities have specific roles and responsibilities in the management of public land and resources.
– There are official lists identifying which entities are considered public authorities. You can find the lists for:
– England at SDLTM22530
– Northern Ireland at SDLTM22550
– Additionally, HM Treasury has the authority to add other entities that may qualify as public authorities through a Treasury order.
This means that only individuals or organisations recognised as public authorities can benefit from this relief when involved in a transaction governed by a planning obligation.
3. Adhering to the Five-Year Time Limit
The third condition is that the transaction must take place within five years from when the planning obligation was established or last changed.
– The timeline starts from the latest date of either when the planning obligation was initially created or when it was last modified.
– For example, if a planning obligation was first signed on 1 March 2004 and then modified on 20 September 2007 and again on 25 June 2008, the transaction must occur by 24 June 2013.
– This deadline is set five years from the most recent modification date, which in this case is 25 June 2008.
It is vital for parties involved to ensure that the transaction remains within this time limit to be eligible for the relief.
Summary of Conditions in Context
To clarify how these conditions work together, consider a hypothetical situation:
– A council (public authority) wants to buy a piece of land from a developer.
– Before the sale, the developer is subject to a planning obligation concerning the land.
– This obligation states how the land can be used and must be enforceable in court.
– The council must complete the purchase within five years of the last change made to the planning obligation.
If all these conditions are met, the transaction can benefit from relief.
Importance of Planning Obligations
Planning obligations play a significant role in land development and usage. They are legal agreements between local authorities and landowners or developers. These obligations are essential in ensuring that new developments contribute positively to local communities and infrastructure.
Common examples of planning obligations include:
– Contributions to local infrastructure, like roads and schools.
– Ensuring that affordable housing is included in new developments.
– Restrictions on how land can be used to protect the environment or local character.
Understanding how these obligations work and their implications for relief can be beneficial not only for developers but also for local authorities managing land use.
Final Points
Being aware of the conditions under SDLTM22520 can help ensure that all necessary criteria are met before proceeding with a transaction. It is also essential for potential purchasers to be aware of their status as a public authority and to track the timelines associated with any planning obligations closely.
Navigating the complexities of planning obligations and their reliefs can be challenging. Therefore, proper planning and consultation with professionals may prove beneficial to meet all eligibility criteria successfully.
Following these guidelines will help in understanding the requirements and enabling successful transactions governed by planning obligations.
Useful article? You may find it helpful to read the original guidance here: HMRC SDLT: Eligibility Criteria for Relief: Planning Obligations, Public Authority Purchaser, Five-Year Limit
