Offering clear, pragmatic legal advice to the rural business community The Agriculture Write newsletter brings you the latest news, updates, analysis and reports from the agricultural and rural sector.
National Planning Policy Framework unveiled
On 27 March, the Government unveiled radical changes to the planning system in England with the publication of the National Planning Policy Framework (“NPPF”). This can be found on the communities.gov.uk website.
The NPPF sets out the Government’s planning policies for England and how they are expected to be applied. At the heart of the NPPF is an intention to simplify the planning system and to change the emphasis of the planning regime to create a presumption in favour of “sustainable development”.
The NPPF acknowledges the importance of the rural economy and acknowledges the need to safeguard the rural environment. Whilst broadly welcomed by the rural sector and the NFU, there remain significant caveats and it is far from clear what constitutes “sustainable development”. In this article we take a look at the NPPF and its potential impact on the agricultural sector.
In January 2011, the Government announced a review of planning policy in England designed to simplify the previous system of Circulars, Planning Policy Guidance and Planning Policy Statements. The NPPF is designed to create a single national policy framework to guide all planning decisions in England and it condenses over a thousand pages of existing planning guidance into a single 59 page document.
The amended guidance came into force with immediate effect on 27 March. Promoting the rural economy The NPPF acknowledges the importance of protecting both the rural economy and the countryside that supports it. It states that planning policies should support economic growth in rural areas in order to create jobs and prosperity. The NPPF advocates a positive approach be taken by planning authorities to “sustainable new development”. To achieve these aims, the NPPF proposes:
- local development plans which support sustainable growth and expansion in rural areas through the conversion of existing buildings and the construction of well-designed new ones;
- promotion and diversification of agricultural and other “land-based rural businesses”;
- encouragement of sustainable rural tourism and leisure developments that benefit businesses and communities in rural areas and which respect the character of the countryside;
- the promotion, retention of development of local services and community facilities in villages (such as local shops, sports venues, cultural buildings and places of worship, etc.).
Conserving the natural environment
The NPPF recognises that Local Planning Authorities (“LPAs”) should take into account the economic (and other benefits) of the best and most versatile agricultural land. It promotes the re-use of previously developed (brown field) land rather than the development of green field sites. Where significant development of agricultural land is, however, necessary, there should be a prioritisation of the development of poorer quality agricultural land.
The NPPF calls for the maintenance of the character of undeveloped coast, particularly Heritage Coast. It also gives “great weight” to conserving landscape and scenic beauty in National Parks, the Broads and Areas of Outstanding Natural Beauty. Planning permission in such areas should be refused for major developments except in exceptional circumstances and where it can be shown that such development is in the public interest.
Protecting Green Belt land
The NPPF attaches great importance to the preservation of Green Belt land. The NPPF does not advocate the creation of new Green Belt (except in exceptional circumstances). Instead, LPAs with Green Belt in their area are encouraged to establish “Green Belt Boundaries” in their Local Plans which set out a clear framework for such areas.
Encouragingly, although the NPPF discourages construction of new buildings within Green Belt land, exceptions for buildings for agriculture and forestry are made. The NPPF also recognises the requirement for affordable rural housing and that the following forms of development may be appropriate in Green Belt (providing that they do not conflict with the purpose of Green Belt designation):
- mineral extraction;
- engineering operations;
- local transport infrastructure;
- the reuse of existing buildings in certain circumstances.
When located in Green Belt land, renewable energy projects will need to satisfy very strict special conditions if they are to proceed, however such special conditions may include the wider environmental benefits associated with increased production of energy from renewable sources.
The NPPF recognises the need for increased housing (and, in particular, the need for affordable rural housing). LPAs are encouraged to identify the size, type, tenure and range of housing required in their locality.
To promote sustainable development in rural areas, the NPPF states that housing should be located where it will enhance or maintain the vitality of rural communities. LPAs should avoid new isolated homes in the countryside unless there are special circumstances such as:
- the essential need for a rural worker to live permanently at or near their place of work in the countryside; or
- where such development would represent the “optimal viable use of a heritage asset”; or
- where the development would re-use redundant or disused buildings and lead to an enhancement to the immediate setting; or
- • the exceptional quality or innovative nature of the design of the dwelling. Such a design should:
- be truly outstanding or innovative, helping to raise standards of design more generally in rural areas;
- reflect the highest standards in architecture;
- significantly enhance its immediate setting; and
- be sensitive to the defining characteristics of the local area.
LPAs are encouraged to identify and bring back into residential use empty housing and buildings where there is an identified need for residential housing and to approve applications to convert buildings from commercial into residential use.
Facilitating the sustainable use of minerals The NPPF acknowledges that mineral extraction is essential to support sustainable economic growth. LPAs are encouraged to identify and include policies for mineral extraction (of both local and national importance) in their area (this precludes peat extraction).
The NPPF calls for the identification of “Minerals Safeguarding Areas” to protect mineral extraction infrastructure. It also recognises the possibility of prior extraction of minerals from land due to be developed for other purposes.
The NPPF promotes the increased use of renewable and low carbon energy and encourages LPAs to recognise the contribution of renewables and low carbon energy to the economy. It encourages LPAs to:
- have a positive strategy towards energy production from renewable and low carbon sources;
- design local planning policies to maximise renewable and low carbon energy development;
- promote energy efficiency improvements in existing buildings;
- consider the identification of suitable areas for the development of renewable and low carbon energy sources and support the infrastructure required to capture these;
- identify opportunities where development can draw its energy supply from decentralised, renewable or low carbon energy systems;
- create a presumption in favour of planning applications incorporating renewables or low carbon energy.
The NPPF does represent a step in the right direction in terms of simplification of the often burdensome and over-complicated planning system. The recognition of the importance of the rural community and rural business and the need for affordable housing and transport for those living in rural areas is very welcome.
There is, however, considerable ambiguity as to what exactly “sustainable development” is and how this is likely to be defined going forwards, once implementation of the NPPF at local level starts to happen.
No doubt, as time progresses, the practical effects of the NPPF will become clearer. We shall of course keep you up to date on developments.
Boost to Renewable Energy Generation on Farms
The Government has published amendments to planning rules (which came into force on 6 April 2012) which give Permitted Development rights to small scale renewable energy generation on farms.
The amendments mean that the installation of anaerobic digesters and biomass boilers and certain other non-domestic micro generation equipment will be permitted under planning legislation without the requirement for the usual planning application process beforehand.
Buildings for the storage of fuel and waste from a biomass boiler or anaerobic digestion system are also Permitted Development provided that the waste or fuel is produced within land on the farm unit and such buildings are not within 400m of a ‘protected building’ (protected building being normally one occupied by people).
The amendments also introduce a completely new Schedule to the Permitted Development Order which (subject to certain exceptions in protected areas), allows the installation of solar PV equipment on agricultural buildings (or standalone solar equipment within the curtilage of an agricultural building). The new Schedule also permits the installation of ground source heat pumps, water source heat pumps and the construction of a flue for a biomass heating system or for a combined heat and power system.
The amendments mean that farmers who wish to install small scale renewables on farming or nondomestic land can now do so without the need to obtain planning permission.
A round-up of recent farm tax cases
Agricultural Property Relief (“APR”) continues to be a contentious area and, mostly, the Special Commissioners are sticking to the legislation rather than caving in to HMRC’s aggression.
The recent case of Hanson illustrates this point. Mr Charles Hanson was the life tenant of a trust and when he died the assets of the trust, which included a farmhouse, fell to be taxed. The Trustees claimed APR on the farmhouse. However, Mr Charles Hanson did not live in the farmhouse; it was occupied by his son, Nick.
Charles and Nick Hanson
owned 25 acres of land together. Nick also farmed another 128 acres which he owned personally. Readers will know that APR only applies to farmhouses if they are “land with a house” rather than “a house with land”. It was common ground that if only the 25 acres was included, this was not enough land and APR would not apply; but if the 128 acres were included as well, then the land would predominate and APR would apply. The problem was that the relevant land was not in the same ownership as the house, even though it was farmed from there.
The Tax Tribunal looked at the actual wording of the relevant section, s115(2) of the Inheritance Tax Act 1984:
“agricultural property” means agricultural land…and includes any building…if the building is occupied with agricultural land…and the occupation is ancillary to that of the agricultural land…; and also includes such… farmhouses…as are of a character appropriate to the property.”
The Tax Tribunal decided that the crucial link was the common occupation of the house and land; this was enough to give the house its agricultural character and APR would apply. Common ownership was not necessary.
The Tax Tribunal specifically disagreed with the decision in the 2003 case of Rosser, where the parents continued to live in the farmhouse (and retained 2 acres) after giving the other 39 acres of the farm to the next generation. Here there was some (albeit weak) evidence that the whole farm continued to be managed from the farmhouse, but because the ownership was different the 39 acres were not taken into account and APR was denied. It is thought likely that HMRC will appeal in the Hanson case and we await the outcome with interest.
Turning now to income tax, the case of Pratt was also a success for the taxpayer. The taxpayers were a farming partnership, running a mainly dairy farm. The 239 metre farm drive had last been re-surfaced with tarmac 30 years ago and was in considerable need of repair. Repairs can be offset against income for tax purposes; replacements are considered to be capital expenditure and cannot be deducted from income tax. It is well-established law that a repair which brings an asset up to modern standards is not a replacement.
The taxpayers spent £23,300 on having the drive re-laid, this time with a concrete surface and with new kerbing. The drive was not widened and its load-bearing capacity was not increased. The taxpayers claimed the whole sum as a deduction against revenue and HMRC disagreed. Although there was only a small amount of tax at stake, the case went to the Tax Tribunal, who agreed with the taxpayers that the works were repairs and therefore deductible against income tax.