Developers offer £40,000 gift to cover stamp duty bill on new village hall
Story from Cotswold Journal by Vivien Mason
A PARISH Council which was faced with an unseen £32,000 stamp duty bill for a brand new village hall, has had a life-line offered.
Developers Linden Bovis, who built the new hall in Upper Rissington as part of a 106 agreement attached to a large housing development at Victory Fields, had built the hall, valued at £800,000, on the understanding the parish council purchase it from them for £1.
But despite many months passing since the hall was built, councillors were unaware they were liable to pay the stamp duty until exchange papers were about to be signed late last year.
In a statement on the parish council’s website, Cllr Brian Hanks wrote: “At the meeting of the parish council on November 23 the council agreed to acquire the new hall from the developers.
“Shortly after this, the council’s solicitors advised us, for the first time, that the parish council – which means the residents in the village – will be liable to a stamp duty charge of £32,000 – an average of about £60 per house. This was an amount that the council had not budgeted for. Unfortunately the Section 106 agreement, between Cotswold District Council and the developers covering the provision of the new hall did not address the stamp duty liability.”
At a meeting of Upper Rissington Parish Council in January, chairman Cllr Caroline Maclean said she had looked through all the information on the 106 agreement.
“There was no mention at all anywhere of any stamp duty,” she said.
Councillors were told the developers were willing to offer a donation of £40,000 which would cover the stamp duty, though an amendment would have to be made to the 106 agreement over maintenance of the building which is currently the developer’s responsibility for five years.
Cllr Andrew Maclean said he was happy to accept the offer from Linden Bovis while Cllr Jason Corban said the additional £8,000 should cover maintenance costs.
“I am still unhappy that parish councils are the only authority who are not exempt from stamp duty. Perhaps we should still challenge about paying it,” said Cllr Maclean.
Ward councillor Mark Mackenzie-Charrington had said in an earlier statement that lessons had to be learned from this: “Many people would not expect to have been landed with stamp duty on a building that has been gifted and they only found out about this at the last moment. The lesson from this is that section 106 agreements must be written in such a way that obligations as to the provision of new builds detail all the associated costs and legalities.”
Councillors voted to accept the payment from the developers under the agreement that a number of ‘teething problems’ with the building are addressed first. Details of the planned transfer of the running of the hall to Upper Rissington Village Hall Trust have not yet been released.