Tax liability scuppers HC homes deal

26 Apr 07
A leading builder has pulled out of the Housing Corporation's development programme after its plans to set up a joint venture company ran into a tax hurdle.

27 April 2007

A leading builder has pulled out of the Housing Corporation's development programme after its plans to set up a joint venture company ran into a tax hurdle.

Taylor Woodrow was poised to build more than 200 homes in Milton Keynes and Swindon with £11.3m it received in the corporation's 2006–08 national affordable housing programme.

Instead of selling the homes on to a registered social landlord, it planned to set up the venture company with a private lender. The homes would have remained in the venture company's ownership but would be managed by RSLs under a 20-year lease.

When it was discovered that the RSLs would be liable for tax if tenants bought their homes under the right to acquire, Taylor Woodrow asked the corporation to lobby the Treasury and request that the company be granted a waiver.

But according to Terry Fuller, the firm's director of partnering, the process was taking too long. 'We are running out of time,' he said. 'I have three sites with allocations on. I have to deliver the housing and spend the money.'

Taylor Woodrow's allocation is being returned to the corporation and will be given to RSLs to build homes in the same areas.

While the developer might still build the homes on behalf of the RSLs, they will remain the property of the social landlords.

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