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Sale of land by individual. Incurred costs for  5 planning permission applications totalling over £25000 with architects fees etc  before one successful. 

Apart from the successful application would the previous application costs be allowable as enhancement expenditure since the client argues that by eliminating unsuccessful planning permission this improved the land value?


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The suggestion is absurd.

EDIT - response toned down, see below

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what do you mean?

are you saying that he applied for permission for 5 sites or he applied 5 times for the same site?


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Wishful thinking

"In order to qualify as enhancement expenditure, expenditure must satisfy all the following conditions: it must

be ON the assethave been incurred for the purpose of enhancing the value of the assetbe reflected in the state or nature of the asset at the date of disposal."


How would failed applications be reflected in the nature of the asset?



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obtaining planning permission is a process.

if I wish to improve the value of land by obtaining planning then I must undertake the process.

say a proposal is put to the planners to construct a house - but the planning is refused for a simple reason that the house is too modern or too big. 

I would argue that the cost of finding that fact out, followed by a successfull application is part of one single process.  that process has enhanced the value of my land.




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Sorry to disagree, blok

If there had been protracted discussions with the planning committee etc, resulting in resubmitted pans etc as part of a single application (which would normally be the case if the house were slightly too large, for instance), I would agree that there is an argument that all of the expenditure should be allowed (though even then there is still an argument that expenditure on the 'failed' plans is not reflected in the nature of the asset at the date of sale).

But I think that if you tried to argue that expenditure on separate, failed, planning applications is reflected in the state or nature of the asset you'd be laughed out of the Tribunal.

In your example the only expenditure that has enhanced the value of the land is the expenditure incurred in lodging a successful planning application.


Expenditure which has proved futile ... before the disposal does not qualify as enhancement expenditure because it is not reflected in the state or nature of the asset at the date of disposal

I consider it nonsensical to suggest that expenditure incurred in order to find out what is not acceptable, in order to establish what is acceptable, is anything other than futile.

Of course, in reality the position is likely to be more complicated than simply considering a series of failed applications and allowing only the last, successful, one. Let's say that an application for a 7-bedroom 3-storey house is submitted and rejected outright. A completely new, successful, application is submitted for a 3-bedroom bungalow. I would expect only the costs of the second application (and, if relevant, an earlier outline planning consent) to be allowed. But what if the original application is modified slightly, reducing the number of bedrooms to 6, and is successful? Well there should not be a great deal of additional expenditure required in preparing the second application, most of the expenditure incurred in the first continuing to be reflected in the second.

So, while my first response may have been blunt and to the point (I had in mind 5 quite separate applications, the costs of each standing on their own) it is conceivable that some of the costs incurred in the first application, and incremental costs of subsequent applications (so far as those costs continue to be reflected in the final application) might be allowable. In my example above, it would be difficult to argue that the costs of the failed 7-bedroom property application were reflected in the state or nature of a piece of land with planning consent for a 3-bedroom bungalow.

But, for instance, the costs of lodging the failed applications themselves will almost certainly not be allowable.

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i too, am sorry you disagree.


you may ultimately be proved correct - but i dont think the tribunal would find it a laughing matter.

my argument is simple, I obtained planning and need to jump through hoops to obtain that plannnig right.  that hoop jumping costs money and involved some trial and error.  there is sufficient nexus.



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