Hello
I have a client who owns land in Cornwall that has a sacred well situated on it.
Other than a discretionary trust or charity are there any other ways in which the land can be ‘gifted back to itself’. Essentially the client would like the public to enjoy the land/ well without risk of it being sold developed etc.
TIA
Sangeeta
Another option is via a company structure - a community interest company with an “asset lock” would work. Or any company limited by guarantee with amended articles of association.
You can incorporate “unlimited” which negates much of the company house filing.
Richard C. Bishop
PFEP
You can register land as common land. That would give it an element of protection.
A transfer to a company will be a disposal for CGT without hold-over relief. You don’t want a charity which would confer exemption apparently because your client does not want to part with it permanently. You will need to bear in mind the tax costs of extracting the land if that is ever proposed. Richard’s post is to the point and my preference is for the guarantee or unlimited company. Remember that someone sill owns it beneficially for IHT purposes. There would be the option of making the company a charity later.
If CGT is a problem the asset could be put into a DT of which the company was a beneficiary with hold-over and then distributed to the company after 3 months but ideally much longer to avoid GAAR. Hold-over should apply then too as a company does not make the DT settlor-interested. Extraction will be a chargeable RPT IHT event so ideally the client will have a nil cumulation and the value of the land will not make a big dent in it for later use. Ideally a full or adequate NRB to the trustees. Should not be a GROB if the client accesses the land on the same terms as the public. No SDLT in, or out (s54(4) FA 2003, but TRS.
A charitable incorporated company might be ideal going the charity route but apparently unless its income is £5k plus it can’t be registered at present.
https://www.gov.uk/setting-up-charity/print
Jack Harper
You could arrange for the well to be consecrated by the Bishop of Truro (if it is not already consecrated). Once it has been consecrated nothing can be done to it without a faculty granted by the consistory court.
Clifford Payton
Alpha Court Chambers
thank you all, very helpful responses.
Jack and generally
I think that link is about 10-11 years old. So far as I know, a CIO isn’t subject to the usual £5k limit on account of it not existing at the time of application.