The Local Authorities (Capital Finance and Accounting) (England) (Amendment) (No. 2) Regulations 2012

Regulation 9

SCHEDULE

Regulation 1(5)

“SCHEDULE Calculation of the sub-liability

1.— (1) This Schedule applies to capital receipts derived from dwellings disposed of by the local authority on or after 1 April 2012—

(a) under Part V of the Housing Act 1985;

(b) to a secure tenant for an amount that is less than the market value of the dwelling; or

(c) by a grant of a shared ownership lease where—

(i) a premium (which is a portion of the market value of the disposed dwelling) was paid and that portion exceeded 50% of the market value of the disposed dwelling; or

(ii) within 2 years of the grant of the shared ownership lease, a premium is paid to acquire a further portion of the disposed dwelling so that the total portion of the market value of the disposed dwelling owned by the person is more than 50%.

(2) This Schedule does not apply to capital receipts derived from the disposal of dwellings that are the subject of an agreement made under section 80B of the Local Government and Housing Act 1989.

2.   In this Schedule—

“available buy back allowance” is an amount calculated in accordance with paragraph 3(2);

“assumed debt” means the amount of debt assumed to be associated with a local authority in a quarter as set out in column A of the table in this Schedule (“the Table”);

“attributable debt” means the amount of debt associated with a dwelling subject to the duty under section 74 of the Local Government and Housing Act 1989 (duty to keep a housing revenue account) set out in “the table of debt associated with HRA properties” dated 1st March 2012 which is published on the website of the Department for Communities and Local Government(1) and deposited at the Department’s principal office(2)

“buy back allowance” is an amount calculated in accordance with paragraph 3;

“local authority share cap” means the amount attributable to an authority set out in Column B of the Table;

“London authorities” means—

(i)

a London borough council; and

(ii)

the Common Council of the City of London;

“previous quarter” means the quarter before the relevant quarter except where the relevant quarter is quarter 1;

“quarter 1” means the period from 1st April to 30th June in a financial year;

“sub-liability” means the amount payable by the local authority to the Secretary of State under regulation 12;

“transaction cost” means in relation to—

(i)

London authorities, £2850:

(ii)

local authorities that are not London authorities, £1300.

3.— (1) The buy back allowance for the relevant quarter means (subject to paragraph 10) 50% of the relevant costs of buying back relevant interest in the relevant quarter where—

(a) “relevant costs” means the expenditure incurred by the authority in the relevant quarter including administrative and incidental costs; and

(b) “relevant interest” means a freehold or leasehold interest in a dwelling—

(i) that has previously been disposed of by the authority, another authority, a new town corporation, a housing action trust or an urban development corporation;

(ii) that was not acquired pursuant to a compulsory purchase order; and

(iii) was not acquired from a body of persons corporate or unincorporate.

(2) The available buy back allowance in respect of a relevant quarter is calculated as follows—

• (buy back allowance for the previous quarter + buy back allowance for the relevant quarter) – available buy back allowance deducted in the previous quarter when calculating the sub-liability.

4.   In this Schedule—

A means the total receipts received from the disposal of dwellings in the relevant quarter;

A* means the value of A in the previous quarter;

B means the total of the attributable debt associated with the dwellings disposed of during the relevant quarter;

C means the assumed debt for the relevant quarter;

D means the local authority share cap for the relevant quarter;

E means the total transaction cost calculated in accordance with paragraph 5;

E* means the total transaction cost for the previous quarter;

F has the meaning set out in paragraph 6;

F* means the figure for F in the previous quarter;

G has the meaning set out in paragraph 7;

G*means the figure for G in the previous quarter;

H means the transaction cost;

I means the number of disposals of dwellings during the relevant quarter;

J means deductible buy back allowance for the relevant quarter and is calculated in accordance with paragraph 8;

J* means the value of J in the previous quarter;

K means the sub-liability for the relevant quarter and is calculated in accordance with paragraph 9; and

K* means the value of K in the previous quarter.

5.   E (the total transaction cost) means—

• .

6.   F means—

• ,

except where the amount is less than zero, in which case F means zero.

7.   G means—

(a) in the period of quarter 1—

• ;

(b) in quarters other than quarter 1—

• .

8.   J means an amount of the available buy back allowance that does not exceed—

• .

9.   Where—

(a) A is less than or equal to K means—

• ; and

(b) (i) A is more than K means—

except where the value for K would be less than , in which case

(ii) K means

.

Transitional provision for calculating the buy back allowance

10.— (1) An authority may treat the following amount as the buy back allowance for the previous quarter for the purpose of calculating the available buy back allowance for the quarter beginning on 1 April 2012—

• 50% of (X-Y) where—

• X is the total expenditure incurred by the authority buying a relevant interest in a dwelling between 1 April 2011 and 31 March 2012; and

• Y is the 2011-2012 buy back reduction calculated under regulation 3(1)(b) of the Local Authorities (Capital Finance and Accounting) (England) (Amendment) (No.2) Regulations 2012.

(2) The value of the available buy back allowance deducted in the previous quarter for the purpose of calculating the allowable buy back allowance for the quarter beginning on 1 April 2012 is zero.

(3) In this paragraph “relevant interest” has the same meaning as in paragraph 3.”

(1)

The document can be found on the Department for Community and Local Government’s website at the following address: www.communities.gov.uk.

(2)

This document is available for inspection at the following address: The Department for Community and Local Government, Eland House, Bressenden Place, London SW1E 5DU.