Although considerable changes are expected between now and them becoming law, the Government’s Planning Gain Supplement (PGS) proposals are already creating confusion.
It is proposed that PGS will be payable when a development commences. Payment will to be made by the now usual means of a self-assessment return.
PGS is intended to be based on the difference in value of the land with and without planning permission. Clearly, the differences in these values could be substantial. If a developer to takes the cautious course of paying more tax on account than may ultimately be due this could prejudice his negotiating position. On the other hand, if the developer underpays PGS based on the anticipated valuations, there appears to be a risk of penalties and interest being charged, if the valuations ultimately agreed are different.
The whole position is further complicated where planning permissions and developments are staged. So far, this looks to be a very complicated area and one which has received scant thought.
It is hoped that there will be more information on PGS in the Chancellor’s forthcoming Autumn Statement, so watch this space!
