Some types of charitable development are entitled to relief from CIL. This is not automatic and must be applied for. To apply for charitable relief, a charity must be the owner of the land and use the land for charitable purposes.
Regulation 43 of the CIL Regulations (2010) sets out the conditions that must be met for a charitable development to be entitled to mandatory relief. They are:
- Registered charities - charities registered with the Charity Commission
- Exempt charities - charities which cannot register under the Charities Act 2006 and are not supervised by the Charity Commission
- Excepted charities - charities which are excepted from the need to register but are still supervised by the Charity Commission
- Other bodies - where they are established for charitable purposes
To apply for charitable relief from CIL:
- the claimant must be a charitable institution
- the claimant must own a material interest in the relevant land, and the claimant must not own the interest jointly with a person who is not a charitable institution
- the chargeable development must be used in full, or mainly, for charitable purposes and it must be occupied or controlled by a charitable institution
- the granting of relief would not constitute state aid
Where a development is owned jointly by a charitable institution and a private institution, relief will be given to the proportion owned by the charity.
How to claim
To claim for charitable relief the claim for relief must be submitted using CIL Form 2: Claiming Exemption of Relief (external link). This form must be submitted before development is commenced, and must be submitted by the charitable institution. If there is more than one material interest in the land, each claimant must submit details of the portions they own so that CIL can be split accordingly.
The Council will then assess the claim for relief and notify the claimant(s) in writing of the decision, its reasons for the decision and the amount of any relief granted.
If the development is commenced before the Council has notified the claimant of its decision, then no relief can be given and the full CIL amount will be due. If a commencement notice is not received prior to commencement of the development, then the development will not receive relief and the full CIL amount will be due.
In some cases, a disqualifying event may occur whereby the conditions for granting relief no longer apply and so any relief that was granted on the chargeable development can be "clawed back". There is a seven year clawback period on charitable relief, effective from the date the development is commenced. These events include:
- change of purpose - the owner of the land granted relief ceases to be a charitable institution or the building changes use to a non-charitable use
- change in ownership - the land granted relief transfers from a charitable institution to a non-charitable institution
- change of leasehold - charitable relief is given on leased land, and the lease is then terminated before the end of its term with the new owner a non-charitable institution
Where a disqualifying event occurs, the claimant must notify us within 14 days of the event. Failure to do so will result in a surcharge, in addition to the full CIL amount.
If a disqualifying event occurs before commencement, the relief is cancelled and the full charge is due. However, a new claim from the charitable institution can be made.
If a disqualifying event occurs after commencement, the CIL amount is due.
Whether before or after commencement, where a disqualifying event occurs, a revised liability notice must be issued showing what is payable, and a demand notice must be served to collect the CIL amount due.
You have the right to appeal against a grant of relief. Appeals should be made to the Valuation Office Agency. Further information can be found through CIL Appeals.