Self build with gifted land

fowlerj31

Hi all,

So I am after some advice on the best steps to take financially and what the step by step process is when building a house on gifted land.

My grandparent lives on a 4+ acre plot where she used to run a commercial business from. She currently has the old building (derelict tearoom) still at the side of her house which still has its own access from the road etc. She is happy to gift me a strip of her land where the derelict building sits and to have my own access which is separate to hers. If we was to apply for planning permission / change of use on the ‘brownfield land’ that she has gifted me would it be better to a) gift me the land before we apply for outline planning permission or b) gift me the land once we achieve planning permission. I am asking this from an Inheritance tax perspective and how it would affect this. Also, what the first step would be to get outline planning permission, who to speak to etc (planning consultant, architect) 

For a self build mortgage how would this work as we already have a bit of cash for a deposit then the value of the land as equity already (if we get the planning permission).

Thanks

AdrianC

Ownership of land is totally irrelevant to planning permission - you can apply for PP on somebody else's land.

Outline PP just says "Yep, you can build something vaguely like that there, come back to us when you've figured the details." - great if you want to sell land for somebody else to develop. But you might as well go straight to the proper app, right?

Do you know what you want to build?

fowlerj31

Hi Adrian,

thanks for the reply. My thought was that if I go for the outline planning permission and i get the approval then the land becomes more valuable so as for inheritance tax I could possibly have to pay more? Where as if she transfers the land to me prior to any planning then the land would be worth much less which would mean less in inheritance tax should I have to pay that. Or is that not the case?

Does outline planning permission not affect the cost of the land? 

We are looking at a 4 bed detached with a garage and have a rough sketch I have modelled on a 3D site but nothing more than that!

AdrianC

Given your granny isn't actually dead yet, IHT is irrelevant at this stage.

Living people make gifts, dead people leave inheritances.

If they die within 7yrs of the gift, then IHT may come into play. But it might not.

It's the same land - with the same derelict building(s) and the same chance of getting PP - being gifted in either case.

Doozergirl

fowlerj31 said:

Hi Adrian,

thanks for the reply. My thought was that if I go for the outline planning permission and i get the approval then the land becomes more valuable so as for inheritance tax I could possibly have to pay more? Where as if she transfers the land to me prior to any planning then the land would be worth much less which would mean less in inheritance tax should I have to pay that. Or is that not the case?

Does outline planning permission not affect the cost of the land? 

We are looking at a 4 bed detached with a garage and have a rough sketch I have modelled on a 3D site but nothing more than that!

I think you would be right.  Permission will
increase the value.   Better to take the land on before applying for anything. 

Outline permission is a bit of a waste of money, you may as well go for full permission.  I would certainly start with a planning consultant to explore the probability of success.   They work with the deeper planning legislation rather than just design.  It's prudent to be aware and prepared of any challenge you might face before enquiring with the local authority in the form of pre-application advice or a full application. 

fowlerj31

Doozergirl said:

fowlerj31 said:

Hi Adrian,

thanks for the reply. My thought was that if I go for the outline planning permission and i get the approval then the land becomes more valuable so as for inheritance tax I could possibly have to pay more? Where as if she transfers the land to me prior to any planning then the land would be worth much less which would mean less in inheritance tax should I have to pay that. Or is that not the case?

Does outline planning permission not affect the cost of the land? 

We are looking at a 4 bed detached with a garage and have a rough sketch I have modelled on a 3D site but nothing more than that!

I think you would be right.  Permission will
increase the value.   Better to take the land on before applying for anything. 

Outline permission is a bit of a waste of money, you may as well go for full permission.  I would certainly start with a planning consultant to explore the probability of success.   They work with the deeper planning legislation rather than just design.  It's prudent to be aware and prepared of any challenge you might face before enquiring with the local authority in the form of pre-application advice or a full application. 

Thanks,

So you would recommend to get the land transferred into my name first (to get the ball rolling with the 7yrs) once it’s in my name then speak with a planning consultant or would you get them onboard straight away before I transfer the land into my name? 

Cheers