Local Government Act 2003

Capital receipts

9 “Capital receipt”

(1) Subject to subsection (3), references in this Chapter to a capital receipt, in relation to a local authority, are to a sum received by the authority in respect of the disposal by it of an interest in a capital asset.

(2) An asset is a capital asset for the purposes of subsection (1) if, at the time of the disposal, expenditure on the acquisition of the asset would be capital expenditure.

(3) The Secretary of State may by regulations—

(a) make provision for the whole of a sum received by a local authority in respect of the disposal by it of an interest in a capital asset, or such part of such a sum as may be determined under the regulations, to be treated as not being a capital receipt for the purposes of this Chapter;

(b) make provision for the whole of a sum received by a local authority otherwise than in respect of the disposal by it of an interest in a capital asset, or such part of such a sum as may be determined under the regulations, to be treated as being a capital receipt for the purposes of this Chapter.

(4) Where a sum becomes payable to a local authority before it is actually received by the authority, it shall be treated for the purposes of this section as received by the authority when it becomes payable to it.

10 Non-money receipts

(1) The Secretary of State may by regulations apply section 9 to cases where—

(a) a local authority makes a disposal of the kind mentioned in subsection (1) of that section and the consideration for the disposal does not consist wholly of money payable to the authority, or

(b) a local authority receives otherwise than in the form of money anything which, if received in that form, would be a capital receipt under that section.

(2) Regulations under subsection (1) may, in particular—

(a) make provision for a local authority to be treated as receiving a sum of such an amount as may be determined under the regulations;

(b) make provision about when the deemed receipt is to be treated as taking place.

11 Use of capital receipts

(1) The Secretary of State may by regulations make provision about the use of capital receipts by a local authority.

(2) Regulations under subsection (1) may, in particular—

(a) make provision requiring an amount equal to the whole or any part of a capital receipt to be used only to meet—

(i) capital expenditure, or

(ii) debts or other liabilities;

(b) make provision requiring an amount equal to the whole or any part of a capital receipt to be paid to the Secretary of State.

(3) The power under subsection (1), so far as relating to provision of the kind mentioned in subsection (2)(b), shall only apply to receipts which a local authority derives from the disposal of an interest in housing land.

(4) The reference in subsection (3) to housing land is to any land, house or other building in relation to which the local authority is, or has been, subject to the duty under section 74 of the Local Government and Housing Act 1989 (c. 42) (duty to keep Housing Revenue Account).

(5) Regulations under subsection (1) may include provision authorising the Secretary of State to set off any amount which an authority is liable to pay to him under this section against any amount which he is liable to pay to it.