High Court ruling provides clarity on Self-Build Relief in relation to application of CIL
The High Court’s recent decision on R (on the application of Mr Stephen Luck) v Bracknell Forest Borough Council [2025] EWHC 2984 (Admin) (available here), confirms Self-Build Relief under the Community Infrastructure Levy (“CIL”) can be lost before the clawback period begins if a disqualifying event (“DE”) occurs prior to completion, even where completion is unlikely. Additionally, the ruling verified councils lack unfettered discretion to waive CIL liability, relief is strictly prescribed by the Community Infrastructure Levy Regulations 2010 (the “CIL Regulations”).
Background:
The Claimant Mr. Luck obtained planning permission in 2017 with 100% self-build CIL relief of £334,478.27. Development was initiated but not completed. In 2024, new permission was granted to SPL Investment Holdings Ltd (“SPL”), where Mr. Luck served as a director. Later that year, Mr. Luck sold the site to Pineacres Ltd without notifying the Council or transferring CIL liability. In 2025, development proceeded under the 2024 permission. The Council then issued CIL liability demand notices to Mr. Luck for £334,478.27 plus £2,500 relating to the 2017 planning permission. Despite repeated requests, the Council declined to withdraw the notices.
Grounds of Challenge:
In response, Mr. Luck challenged the Council’s actions by way of Judicial Review on the following grounds:
- The Self-Build exemption still applied as no DE occurred, and the Council should have revoked the demand notices. The Council considered the sale to Pineacres Ltd as a DE removing the exemption. The Claimant’s argument was that ‘’ the DE, for the purposes of the self-build exemption in Regulation 54D, can only occur during the clawback period, i.e. three years from the compliance certificate under the Building Regulations. Here, the clawback period had not begun and thus there was no DE’’.
Additionally, the Claimant purported that according to the wording of the CIL Regulations, Self-Build Relief is only lost after works are completed and the property is not subsequently occupied as self-build housing.
- The Council erred when first asked to waive the Claimant’s CIL liability by claiming no discretion, and in subsequently refusing to withdraw the demand notices despite contemplating exercising their discretion when requested to withdraw the demand notices a second time. The Claimant also raised the below further sub-grounds against this decision:
- ‘’ Thirdly, again assuming the discretion, that the Defendant is seeking “double recovery” without statutory authority’’.
- ‘’Fourthly, that the exercise of the discretion was unlawful and contrary to general public law principles’’.
Courts findings:
The High Court dismissed the Claimant’s arguments and rejected the challenge for the following reasons.
Ground 1:
The Court found in favour of the Council confirming the interpretation most consistent with the wording of the CIL Regulations was that the DE need not occur strictly within the clawback period. The Court concluded ‘’ Regulation 54D(1) says ‘a disqualifying event occurs before the end of the clawback period’. It does not say the DE has to occur during the clawback period. The alleged DE, the sale of the property, did occur ‘before the end’ of the clawback period.’’ Accordingly, Self-Build Relief can be forfeited before the clawback period begins if a DE occurs, the court also clarified that under the CIL Regulations a DE immediately disapplies the exemption resulting in total CIL liability. Therefore, this ground failed as the Court concluded there was a clear DE in this instance.
Furthermore, the Court dismissed the Claimant’s contention that under the CIL Regulations, development only stops being ‘self-build housing’ once it is completed and no longer occupied as such. This is because the intention is a key consideration, the Court concluded ‘’If the intention necessary for the claim in Regulation 54A no longer exists, here by reason of the sale, then that is a ‘change relating to the self-build housing’, because the basis of the exemption has fallen away’’. This clarifies that the Self-Build exemption is disapplied once the intent to self-build ceases.
Ground 2:
The Court held that the Council has no general discretion to waive CIL. The reasoning in the case of R (on the application of Clamp and another) v Revenue and Customs Commissioners [2021]EWHC 2360 (Admin) was drawn on, particularly that it cannot be expected for a ‘’tax collecting authority to have an unfettered discretion to waive the tax that parliament had set.’’ The Court reiterated this reasoning is especially applicable here, as local authorities lack the comprehensive powers HMRC possesses. The Court further held that interpreting the Council as having unfettered discretion is inconsistent with the spirit of the CIL Regulations. Furthermore, the Court clarified even if the Council withdrew the demand notices, underlying liability would still be present in line with the decision in R (on the application of Brathwaite and another) v East Suffolk Council [2022] EWCA Civ 1716.
In addressing the Claimant’s argument that the Council is seeking double recovery without authority the Court clarified ‘’some element of double recovery is not inimical to the scheme’’ and would not mean the CIL Regulations should be read alternatively. The Court referenced the case of R (Hudson Contract Services) v SSBIS [2016]EWHC 844 (Admin) to stress this point.
Lastly, the Court found the Council lawfully exercised discretion, evident by their consideration of the Claimant’s personal position, the CIL Regulations framework, and the matter of avoiding double recovery. Therefore, Ground 2 arguments were rejected.
Conclusion:
The judgment reminds developers and self-builders that DE’s can remove Self-Build Relief any time prior to the clawback period ending, despite completion not yet occurring or being anticipated. Therefore, self-builders should take precautionary steps where a DE such as a site sale is intended. These can include transferring CIL liability using Regulation 31, utilising abatement provisions under Regulation 74B, and ensuring the sale contract contains terms permitting the buyer to seek reimbursement from the seller under Regulation 74B.
Additionally, this ruling clarifies the limits of local authorities’ discretion in withdrawing demand notices, confirming it is prescribed. It also highlights that some element of double recovery is not entirely prohibited under the CIL scheme.
