Moonshine Posted April 5, 2019 Share Posted April 5, 2019 I am in the position of potentially being able to develop my current residence, to build two additional dwellings and retain the existing one. In the situation that i was able to get planning, i may want to 'commence' the development fairly quickly after the decision to lock in the planning decision, and relax a little to consider my options, without worrying about it lapsing after 3 years from the date of the decision notice. As i understand it, to truly be able to commence the development i will have to settle any pre-commencement conditions then pay the CIL within 60 days of commencement. What i wanting to do, is limit the CIL due, as one of the proposed dwellings will be for our own use (self-build), and in that case upon commencing the development i would only be liable for CIL on one of the houses. i guess there is no way to be exempt on two properties! At the planning application stage do i just need to fill in and submit the CIL exempt form for the one house? https://ecab.planningportal.co.uk/uploads/1app/forms/form_7_self_build_part_1_exemption_claim.pdf Link to comment Share on other sites More sharing options...
Ferdinand Posted April 5, 2019 Share Posted April 5, 2019 (edited) 57 minutes ago, Moonshine said: I am in the position of potentially being able to develop my current residence, to build two additional dwellings and retain the existing one. In the situation that i was able to get planning, i may want to 'commence' the development fairly quickly after the decision to lock in the planning decision, and relax a little to consider my options, without worrying about it lapsing after 3 years from the date of the decision notice. As i understand it, to truly be able to commence the development i will have to settle any pre-commencement conditions then pay the CIL within 60 days of commencement. What i wanting to do, is limit the CIL due, as one of the proposed dwellings will be for our own use (self-build), and in that case upon commencing the development i would only be liable for CIL on one of the houses. i guess there is no way to be exempt on two properties! At the planning application stage do i just need to fill in and submit the CIL exempt form for the one house? https://ecab.planningportal.co.uk/uploads/1app/forms/form_7_self_build_part_1_exemption_claim.pdf It can be complicated and there are more elephant traps waiting for you than in Dumbo. Potentially you could be exempt by doing them in sequence x years apart, but you would need to be bulletproof, and there are probably bigger savings to be made from Taxes and stuff rather than merely avoiding CIL and VAT on the build cost. A couple here have done it iirc, and may be able to advise. You also have to think about Tax on the other one, depending what you choose to do with it, and with the one you are living in, what vehicle eg company etc to use for the build, and how to manage the different aspects. You also need to manage the value uplift when you get PP, and whether to split the development one off before or afterwards. My feeling would be to keep the self-build as separate as possible, and consider the other one separately. Then you need to think what kind of vehicle is suitable if any, and how you will get the money out. EG if you injected the site into a Ltd you could potentially get the value of whatever you put in as a withdrawal, 320k out tax free for pensions (4 years back allowances for 2 people into a SiP if you have put nothing in for some time), and the rest at 10% tax under entrepreneur’s allowance, for example. My suggestions 1 - Work out your objectives .. the what not the how. 2 - Take seriously good advice on the how. 3 - KISS as far as possible. There are now rules in place that will catch lots of contrived ideas - playing smoke and mirrors will bite you in the bum. 4 - The cardinal sin you MUST avoid is to start before you have a complete roadmap. 5 - But once you start execute your roadmap quickly, as tax systems change with the seasons. Just my opinion... Ferdinand Edited April 5, 2019 by Ferdinand 1 Link to comment Share on other sites More sharing options...
newhome Posted April 5, 2019 Share Posted April 5, 2019 41 minutes ago, Moonshine said: What i wanting to do, is limit the CIL due, as one of the proposed dwellings will be for our own use (self-build), and in that case upon commencing the development i would only be liable for CIL on one of the houses. i guess there is no way to be exempt on two properties! At the planning application stage do i just need to fill in and submit the CIL exempt form for the one house? No way of obtaining an exemption on two properties afaik. You also need to live in the house for 3 years or they can cancel the exemption. You cannot stick a spade in the ground without sending back the CIL exemption form or they can cancel the exemption too. CIL Exemption Warning You also need to consider what evidence you will use for completion as if you aren't getting a self build mortgage or a warranty that leaves only the VAT claim to evidence completion without which they can cancel the CIL exemption too. As you are building 2 properties I would be careful with that as you won't be eligible for a VAT reclaim on the second property regardless and HMRC may not like the fact that you have built 2 properties and try to refuse the reclaim for your own house. They might not but you are risking not having the completion evidence if you aren't getting a self build mortgage or warranty. They do seem to be applying new and unexpected criteria these days. Also consider when HMRC may decide that the 2 properties that aren't your principle residence will be liable for CGT. They seem to be tightening up the rules for CGT too although there is no evidence that it has hit self builders in an unexpected way just yet, but they do seem to be a law unto themselves. Lots to consider. As to when to send part 1 of the exemption form I don't see an issue with sending it with the planning application but I don't think that precludes you from being able to apply for it later. Might be worth asking the planning office what they would prefer. Link to comment Share on other sites More sharing options...
Moonshine Posted April 5, 2019 Author Share Posted April 5, 2019 Thanks, a fair bit to understand. Another thing we might do is if we got planning, maybe sell it of in one go, I don't know. It seems a lot cleaner and don't think we would be liable for CGT so much. I am just trying to figure out what things we should put in place now at the planning stage to save £££ and aggro later, if we did get planning. Link to comment Share on other sites More sharing options...
Ferdinand Posted April 5, 2019 Share Posted April 5, 2019 17 minutes ago, Moonshine said: Thanks, a fair bit to understand. Another thing we might do is if we got planning, maybe sell it of in one go, I don't know. It seems a lot cleaner and don't think we would be liable for CGT so much. I am just trying to figure out what things we should put in place now at the planning stage to save £££ and aggro later, if we did get planning. I think the way to think about it is that you are taking on a project where getting your PP is only one phase, so you have a strategic planning stage for your whole project before you get into subprojects such as getting PP. Link to comment Share on other sites More sharing options...
Moonshine Posted April 5, 2019 Author Share Posted April 5, 2019 Fair point, and I think I better get strategically planning as planning app goes in in a few weeks Link to comment Share on other sites More sharing options...
PeterW Posted April 5, 2019 Share Posted April 5, 2019 I would.... split it the plot into its constituent parts and register them separately apply for PP with reserved matters for both to identify if planning is viable convert the PP on the plot you want to keep to what you want, apply for CIL exemption and lock in by starting run the utility connections for both plots sell the 2nd plot as a serviced plot with outline PP and an approval clause so you don't end up living next to something you hate CGT will be limited to the value on plot 2, plot 1 will be absorbed when you sell the main house as primary residence. 1 Link to comment Share on other sites More sharing options...
Ferdinand Posted April 5, 2019 Share Posted April 5, 2019 3 minutes ago, PeterW said: I would.... split it the plot into its constituent parts and register them separately apply for PP with reserved matters for both to identify if planning is viable convert the PP on the plot you want to keep to what you want, apply for CIL exemption and lock in by starting run the utility connections for both plots sell the 2nd plot as a serviced plot with outline PP and an approval clause so you don't end up living next to something you hate CGT will be limited to the value on plot 2, plot 1 will be absorbed when you sell the main house as primary residence. Good KISS. Link to comment Share on other sites More sharing options...
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