MARKET VALUE, CURRENT USE VALUE AND MATERIAL DEVELOPMENT (Hansard, 24 June 1976)

§ Mr. Graham Page
I beg to move Amendment No. 24, in page 9, line 38 after 'schedule', insert— '(b) that notice would be given under paragraph 4 of the 7th Schedule to the Community Land Act 1975 by all of the authorities in the area in which the land is situated stating that they do not intend to acquire the land'.

§ Mr. Deputy Speaker
With this, we are to discuss Amendment No. 25, in page 9, line 46 at end insert ; or (iii) was the subject of planning permission granted before the appointed day, or of a 1854 planning application made before 13th September 1974 for which permission was granted before the date on which current use value tails to be assessed; or (iv) is development which is not materially greater in nature and extent than development for which planning permission was granted before the appointed day, or a planning application was made before the appointed day for which permission was granted before the date when current use value falls to be assessed, as the case may be'.

§ Mr. Page
Clause 7 sets out the definitions of market value, current use value and material development. The amendments deal with current use value. It is in the interests of the Inland Revenue that current use value should be as low as possible. It is better for the Revenue to have the maximum possible difference between current use value and the eventual price on disposal. It is in the interests of the person who has to pay the tax that current use value is as high as possible.
We should ensure that the true current use value is reflected in the final figure. The Bill omits three important points the assessment of current use value. It fails to take into account the possibility of notices under the Community Land Act being served on the owner by an authority intending to acquire the land. These notices can be served at any time and the fear of that will decrease current use value.
Amendment No. 24 provides that in ascertaining current use value we should assume that all authorities which might acquire the property have served notices under the Community Land Act saying that they do not intend to acquire it. This will prevent a false reduction in the value. Amendment No. 25 provides that in assessing current use value we should assume that the property was subject to planning permission granted before the appointed day or of a planning application made before 13th September 1974—White Paper day—for which permission was granted before the date on which current use value falls to be assessed. We should also assume that a development is not materially greater in nature and extent than development for which planning permission was granted before the appointed day, or a planning application was made before the appointed day for which permission 1855 was granted before the date when current use value falls to be assessed, as the case may be.
In all those circumstances we should get a real current use value. The Bill recognises that we must take into account certain assumptions in assessing current use value, but it does not go far enough. The amendments are reasonable points of valuation and I hope that the Minister will accept them.

§ Mr. Denzil Davies
We discussed the provisions of Amendment No. 24 in Committee when I said that they were not necessary because current use value will not be depreciated by the market's reaction to the threat of acquisition under the Community Land Act 1975 because of the provisions of Section 9 of the Land Compensation Act 1961. I undertook to look at the matter again and the Inland Revenue has advised me: We have looked into this again and there does not appear to be any doubt that Section 9 … would apply in the notional current use market envisaged in Clause 7(2) and would neutralise any depreciatory effect flowing from the presence of the local authority in the market". That is the result of a second look at this subject. I hope that the Opposition will agree that their amendment is not necessary.
Amendment No. 25 seeks to increase current use value by including various planning permissions. The Opposition may not be happy with my reply, but if we uplift current use value to market value, we are getting away from the whole concept of current use value. I see no justification for that.
Current use value is a well-recognised concept in valuation. The Opposition are seeking to make it market value while still calling it current use value. They are attempting to relieve taxpayers of some tax. The whole concept of the legislation is that tax is paid on the difference between current use value and market value, and the amendment breaches the principle behind the legislation.

§ Mr. Graham Page
I accept what the Minister said about Amendment No. 24 and I am grateful to have it on the record again. We were in some doubt about this matter in Committee.
1856 I still think that the matters referred to in Amendment No. 25 should be taken into account when current use value is being assessed. However, we shall not press this matter. I beg to ask leave to withdraw the amendment.