Examination of Witnesses (Questions 80-86)
MS LIZ
PEACE, MR
MIKE GUNSTON,
MR LOUIS
ARMSTRONG, MR
CHRIS HART
AND MR
TED WESTLAKE
24 APRIL 2006
Q80 Mr Betts: This is not the information
we have been given.
Mr Westlake: The way it is drafted
it says no.
Q81 Mr Betts: Right, but if there
were to be an element of hope value included would that be a big
complication?
Mr Westlake: It would be a valuation
complication, yes, a large one.
Mr Hart: It would not be a large
complication. It would just make the arguments rather more drawn
out.
Q82 Martin Horwood: I feel I need
to declare an interest because I have just had my garage demolished.
I have a question about the timing of the valuation. Mr Westgate
seemed to be suggesting that any system that was not based on
real sale values but on valuations was problematic, but the RICS
position seems to be that you want the liability for PGS to be
established well before development commences. Our information
is that the valuation is likely to take place at planning permission
stage. Is that something you are in favour of or would you prefer
it to be closer to the actual sale?
Mr Hart: It depends what you mean
by planning permission stage, because this is something else that
came out during the consultation process. As drafted, it suggests
that it is a full planning consent, which will be that all reserve
matters have been agreed. Reserve matters can often not be agreed
until the end of a development, or ever in some cases, so on the
basis of how it was originally drafted we took the view that we
had to have a point and we were getting the impression during
the consultation that we had now moved to a point where the valuation
date would be when sufficient planning consent had been achieved
in order for development to commence, which is a different ball
game.
Q83 Chair: Would that be acceptable?
Would you prefer that?
Mr Hart: As we pointed out, if
you had to wait until complete planning consent was achieved it
might be after the development had occurred, in which case there
would be no planning application.
Q84 Chair: So you would prefer it?
Mr Hart: We pointed out that it
would not work in the way drafted.
Mr Westlake: In other words, I
think what we are saying is that you should have several tax points,
not just one tax point, not just when you start development as
your date for due payment with a retroactive valuation date to
when you had planning permission. It should be at the time of
sale or disposal by the landowner to the developer and then onwards.
Q85 Martin Horwood: This seems to
be so likely to create a lot of work for chartered surveyors that
I think you ought to be available.
Mr Armstrong: It is a planning
interest, not necessarily of any particular sector.
Q86 Martin Horwood: If we link it
to the commencement of work, as Mr Hart just said, what if you
do not commence the work? What if you just get planning permission
and sell the plot with planning permission?
Mr Hart: As drafted, you value
at the point the planning consent is achieved and then, a bit
like the way stamp duty and land tax now work, you effectively
buy a development certificate by paying the tax at the point of
development, which is something we do not agree with, by the way,
because it means that you would go into the commencement of the
development with having an uncertain tax liability, which the
bankers would not fund. Yes, we have been commenting on the way
it is drafted, not necessarily the way we suggest it would be
done.
Chair: I am conscious that we could go
on and on for hours but we cannot because we have another evidence
session. Thank you very much indeed.
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