Is This Conversion The Right Thing

To Do?

Chris Leney, Partner, Robinson & Hall

Introduction

• Land and Property Professionals

• Ipswich, Bedford, Colchester, Buckingham

• From Suffolk Coast to the Cotswolds

• Experienced team of Chartered Surveyors, Chartered

Town Planners and Agricultural Valuers

• Advice from conception to completion

The Next 25 Minutes

• Set the scene

• Should you use PDR?

• Should you be converting this building?

• Financials

• Tax

• The market

Setting the Scene

For Conversion

Grain Store G P Building Listed House

Setting the Scene

Setting the Scene

Setting the Scene

For Conversion

Grain Store

G P Building

Listed House

Should You Use

Permitted Development Rights?

• How do you obtain the best conversion and therefore

best value?

• Is the building convertible in its current form?

• Demolition of adjoining buildings?

• What if some of building was not in agricultural use?

Setting the Scene

For Conversion

Grain Store

G P Building

Listed House

Old Workshop

Should You Use

Permitted Development Rights?

• How do you obtain the best conversion and therefore

best value?

• Is the building convertible in its current form?

• Demolition of adjoining buildings?

• What if some of building was not in agricultural use?

• Restrictive and negative approaches from planners.

• Impact on PD Rights on the remaining holding.

• What is the additional cost of getting full planning?

Should You Be Converting

This Building?

• What is the impact on the rest of the unit?

– Grain Store

– House

– Location within holding

• What is the best use for this building?

– Residential

– Commercial

– Holiday lets

– Other

• Location, Location, Location

The Financials

• Costs of conversion

– Planning Costs

– Conversion Costs

– Services / Access

• Values / Income

– Can you sell if used PDR rights?

– Sale .v. Lease

– What return on investment are you looking for?

The Financials

Residential

• Cost of conversion £360,000?

• Converted value £550,000?

• Rental income £18,000

• Yield on expenditure 5.0%

• Yield on value 3.2%

BUT

• Devaluation of rest of holding

• Taxation issues

• Cost of finance

The Financials

Commercial

• Cost of conversion £260,000?

• Converted value £385,000?

• Rental income £24,000

• Yield on expenditure 9.0%

• Yield on value 6.2%

BUT

• Devaluation of rest of holding

• Patchy Rental Market

• Taxation issues

• Cost of finance

Tax Issues

Inheritance Tax

• Change of status from agriculture

• Increase in value and loss of APR?

Capital Gains Tax

• When to transfer and to whom?

• Who can do the conversion?

VAT

• Treatment of VAT on works

• VAT on income?

Summary

• Should you be converting this building?

• Location?

• Is Residential the Right Use?

• What are the tax implications of your proposals?

• What are you trying to achieve?

• Expected Return on Investment and how are you going

to finance project?

• 3rd Parties on the holding

• Time / risk

• Is it right for you?

Thank You

www.robinsonandhall.co.uk