AC-2025-LON000257 - [2025] EWHC 2984 (Admin)

Under Ground One the Claimant submits that there had been no disqualifying event (“DE”) under Regulation 54D and therefore the self-build exemption should not have been withdrawn, and the Council should have agreed to withdraw the CIL Liability Notice, whether in December 2024 or September 2025. The Council’s position is that the sale of the site to a developer was a DE that automatically led to the exemption being withdrawn and the liability for CIL arising. However, the Claimant submits that the DE, for the purposes of the self-build exemption in Regulation 54D, can only occur during the clawback period, i.e. three years from the compliance certificate under the Building Regulations. Here, the clawback period had not begun and thus there was no DE.

The Claimant had originally argued that the words “a disqualifying event before the end of the clawback period” (in Regulation 54D(1)) must necessarily mean that the event took place during the clawback period. However, he now accepts that those words are wide enough to embrace the possibility that for some reliefs/exemptions the DE might occur before the clawback period starts. The Claimant is forced into this concession because of the way other reliefs/exemptions arise, such as that for charitable relief in Regulation 48. However, for the purposes of the self-build exemption, he continues to submit that the DE must take place during the clawback period.

He submits that the different exemptions have different purposes and under Regulation 2 there are different clawback periods. Therefore, there is nothing inherently unlikely in the time for the DE to occur being different for the various exemptions.

The Claimant submits that for the self-build exemption the DE can only occur during the clawback period because there would be no self-build housing, within the meaning of the Regulations, which would be capable of ceasing to be self-build housing until the clawback period starts. The clawback period only begins on completion of the development. Under Regulation 9 the “chargeable development” is the entire development for which planning permission is granted. Therefore, he submits that the overarching scheme is that the development only can only cease to be “self-build” housing, within the meaning of the Regulations, when it reaches completion and is not then occupied as self-build housing. The trigger events in Regulation 54D(2) are not met until that stage.

There is no failure to comply with Regulation 54D(2)(b) until there is a failure to comply with Regulation 54C, i.e. the service of the notice under Regulation 54C(2). The dwelling is not capable of being let out, see Regulation 54D(2)(c). The self-build housing/communal development would not be capable of being sold, under Regulation 54D(2(d).

Further the Claimant submits that the mere sale of the land to a third party who did not evince an intention to occupy it is not itself a DE. There is nothing in the language of the Regulations to suggest that a subjective intention which could be changed is capable of being a DE.

The Claimant refers to three pieces of extrinsic material to support his interpretation of the Regulations.

Firstly, the Claimant relies on the CIL Guidance, set out in the Planning Practice Guidance at paragraph 094 (Revision 1 September 2019), which states: “A self-build exemption is revoked if a disqualifying event occurs during the 3 year occupancy period…” (emphasis added).”

Secondly, both parties referred to the Consultation Document on the creation of the self-build exemption, dated April 2013. At paragraph 83 that document says: “Should the applicant decide at any point that the development is not going to be a self-build project, they should inform the charging authority and pay the levy”.

Thirdly, I am referred to the CIL self-build exemption claim form. This is a form produced on behalf of the Secretary of State and therefore, although it is not approved under the Regulations, it does have some official support. There are two parts that are relevant. Under Section B it states: “I declare that I will occupy the premises as my sole or main residence for a period of 3 years from completion.” Under the declaration section it states: “I understand… The meaning of a “disqualifying event” for CIL self build exemption and that where a disqualifying event occurs before or after commencement of development I must inform the collecting authority within 14 days.” (emphasis added). The first statement might tend to support the Claimant’s argument; the second statement unequivocally supports that of the Defendant.

The Defendant relies on the caselaw set out above, and the need for strict procedural compliance in accordance with the Regulations if the exemption is to be relied upon.

They submit that under Regulation 54A self-build housing covers both housing under construction (i.e. post implementation but before completion) and housing that is occupied.

The self build housing has to be built and occupied by the same person. This is clear from Regulation 54A(2), which refers to “P” both in respect of the building and the occupation, and P is defined as the person who is eligible for the exemption. It therefore follows that if the Claimant, who was P for the purposes of Regulation 54A(1), then sells the property to a developer that is a DE. The terms of Regulation 54A(2) are no longer met.

Therefore, Regulation 54D(2)(a) was met when the sale occurred, as the development ceased to be self-build housing at that point. The exemption is then automatically withdrawn under Regulation 54D(3). The Claimant failed to serve a notice under Regulation 54D(4), but if this had been done there would have been a duty on the Council to serve a notice under Regulation54D(7) providing for the full amount of CIL to be payable.

The Defendant submits that the Claimant’s argument is contrary to the words of Regulation 54D(1), which do not restrict the timing of the DE to taking place during the clawback period but simply say that the DE must occur “before the end of the clawback period”. Further, they submit that it is conceptually wrong to find the exemption can only be withdrawn during the clawback period, because if an exemption can be claimed before the development commences (in this case in January 2017) then it must be capable of being lost before the development is completed. Otherwise, the Council is potentially in the position where completion is delayed, or indeed never takes place, where the development is plainly not self-build housing, but the Council cannot levy the CIL that is properly due, or any liability is subject to a long delay. The Claimant’s argument that the Defendant could serve a Completion Notice under the Town and Country Planning Act 1990 is wholly impractical.

In terms of the Claimant’s argument that it is unfair that the Council can levy the full sum for a development that will never be completed and effectively achieve double recovery, the Defendant firstly submits that the Claimant had the benefit of having commenced the development and occupied the outbuilding pursuant to the 2016 permission for some 7 years. This strongly mitigates any alleged unfairness arising from the Council’s interpretation.

Second, the Regulations provide mechanisms to avoid the Claimant having to pay the CIL due. Firstly, under Regulation 32 the Claimant could have transferred liability to another person up to 14 days after the sale of the site.

Third, under Regulation 74B the Claimant could have applied for abatement of the CIL on the 2016 permission, against the CIL due on the 2023 permission. There were two ways this could have been done. The Claimant could have sought abatement between January and October 2024, i.e. between the grant of the 2023 permission and the time when he sold the site. Alternatively, he could have contracted on the sale that the purchaser (developer) would apply for abatement before commencing the 2023 permission, and then refund the CIL paid on the 2016 permission. For whatever reason the Claimant has taken none of these courses. I note that neither the Claimant, nor Mr Leigh (his agent), have given any details of the terms of the sale of the land.

The statutory scheme is therefore comprehensive and deals with all the situations that arise. The situation the Claimant now finds himself in is one that he could have avoided if he acted in accordance with the Regulations.