SDLTM22505 - Reliefs: Compliance with planning obligations
General overview of FA03/S61
This relief is designed to relieve a developer from a potential
double charge where they have entered into planning obligations in
the course of a development.
It is common for a planning authority to require the
developer to enter into planning obligations (for example, to build
a new road or school or to make a financial contribution) as a
condition of the authority granting planning permission for a
development.
Where the obligations require extra building works, as
opposed to a financial contribution, the developer will not usually
want to retain that facility once it is finished. They will usually
want to transfer it to a public authority to run from then on (for
example, if a road is built the developer may transfer it to the
local highways authority).
If the developer acquires the land from its original owner
and, when the building is completed, transfers it on to a public
authority, the developer may be subject to an effective double
charge.
Although the public authority will be liable for any Stamp
Duty Land Tax on the latter transaction, it will usually seek
reimbursement from the developer, as part of the arrangements for
the granting of planning permission.
By claiming the relief, the public authority relieves itself
of the Stamp Duty Land Tax charge, so relieving the developer from
a double charge.
To obtain the relief, the public authority must obtain the
chargeable interest from the developer in order to comply with a
planning obligation imposed on the developer.
This means that the transfer to the public authority must be
a condition of the planning permission. Transfers without this
condition in the planning permission are not transfers in order to
comply with an obligation, as there is nothing to with which to
comply.
The other requirements are
- that the transfer to the public authority must take place within five years of the planning obligation being entered into or modified
- the purchaser must be one of a defined
class of public authorities
