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Development Land Tax

Volume 928: debated on Friday 25 March 1977

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asked the Chancellor of the Exchequer what plans he has to exempt provisional agreements for lease or funding, made before commencement of development, from being treated as disposals for the purposes of development land tax; and if he will make a statement.

Where, under the terms of a lease or an agreement for a lease, the owner of an interest in land undertakes to bear some or all of the cost of a building subsequently to be erected on that land, no account can, as the law now stands, be taken of those costs in calculating his development land tax liability. Accordingly, where the rent reflects the value of the site as developed, more tax may be charged than is justified. My right hon. Friend proposes to include in the coming Finance Bill provision to allow costs incurred in such circumstances as expenditure on improvements. This provision will take effect from the appointed day for development land tax purposes, 1st August 1976.