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Readers’ forum: Should value of property sale be apportioned?

07 November 2022
Issue: 4864 / Categories: Forum & Feedback
VAT on land disposal

A landowner who has let out his farm on a two-year farm business tenancy (FBT) with one year break clauses has been invited to contribute three or four of his green fields to a large housing development in his village under a promotion agreement.

It seems that a potential planning condition would require that if planning permission were granted the developer would have to build a school first and then the houses. The developer typically requires vacant possession but there is talk about possibly immediately re-entering into an FBT for a period after the sale with the existing tenant until the school/infrastructure are complete and the developer is ready to build housing. There is a risk that if the land is not farmed it could revert to land with high environmental value which could encumber the future development....

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