NHF to lobby Inland Revenue again on stamp duty rules

The NHF will lobby the Inland Revenue to change rules that force charitable associations to pay stamp duty on a whole site if they sell more than half of it.

The rules apply when they build homes for sale on more than half a site or sell the land to another association – even a charitable one.

This prevents one association developing sites for another and could hinder the practice of cross-subsidising social housing from the proceeds of sales.

The NHF wants to meet the Inland Revenue this month to discuss a concession. The body won changes to the stamp duty land tax regime last May when the Revenue agreed to give associations “partial relief” (HT 7 May 2004, page 14).

Previously, charitable associations had to pay the tax on a whole site if any part of it were sold or used for housing for sale. This could have cost them up to £10m.

But the NHF and a group of lawyers persuaded the Inland Revenue to allow charitable associations relief from tax on the social housing portion of a site if less than half of the plot were sold.

Charlie Proddow, a partner at solicitor Devonshires, said relief may be clawed back after land or homes are sold to other associations for affordable housing.

He said: “That’s an increasingly likely scenario where grant is going to fewer associations but secondary associations are taking on homes.”

Bob Wilson, head of finance policy at the NHF, added: “For landlords to be liable if they sell land to another landlord though the land was exempt when they bought it is an anomaly.”

He said he would approach the NHF’s lawyers’ group to check there were no other outstanding stamp duty land tax issues to raise with the Inland Revenue.