Can you talk me through the order of selling land for development

[OscarsWild]

I WILL be talking to a solicitor but would appreciate some basic info.

My mum is looking ahead to when she dies (she's in her 90s.)

Her large garden is 'ripe for development'- possibly 10 homes.
She's talking about the process and us as a family getting our ducks in a row.

So....if we sell the house and the plot to a developer, who applies for planning permission and who draws up such plans?
-Would that be the builder?
-Would we need outline PP before the sale to them?
-Or would they buy on the basis that they fight for PP themselves?
-Do we stand to gain more financially by having PP first, as outline only?

I've noticed that where I live, planning applications are usually made on behalf of the land owner by an architect or the developer.

Which is best and why?

@BubblesBuddy

Thanks.

We aren't over the limit re IHT - just spoken to an FA about this.
My dad's portion of allowance passes to my mum, plus the value of their house is exempt from the IH as they lived there.

The actual allowance comes in at just over £900K,

I'm not sure about bungalows- the whole estate is bungalows and this would be an extension off- like another small close.

It's at the bottom of a cul de sac and I doubt another 6 -10 houses would make much traffic difference.

I appreciate your thoughts though!

I've spent the last 20 years objecting to PApps where I live- 'Doomsday village' which actually hit the main national news due to over-development- so I'm pretty clued up on objecting and reasons to object.

@BubblesBuddy- it's not as simple as adding the house value (yes that's part of it) but currently the IHT threshold is increasing each year to 2020.

Your estate will owe tax at 40% on anything above the £325,000 inheritance tax threshold when you die (or 36% if you leave at least 10% to a charity) – excluding the 'main residence' allowance

IHT to be scrapped on up-to-£1m homes by April 2020
Former Chancellor of the Exchequer George Osborne revealed in July 2015's Summer Budget that he'd scrap the duty when parents or grandparents pass on a home worth up to £1 million (£500,000 for singles). This is being phased in gradually until April 2020.

However, the way this works in practice takes some explaining...

The basic allowance is unchanged
The current allowance whereby no inheritance tax is charged is on the first £325,000 (per person) of someone's estate – which is the value of their total assets they leave behind when they die. Couples can leave a home worth £650,000 without it attracting inheritance tax (singles £325,000). Above the threshold, the charge is 40%. This remains unchanged. What has changed is the introduction of a new 'main residence' band.

How does the new 'main residence' band work?
New for the 2017/18 tax year was the additional 'main residence' allowance. Known as the residence nil rate band, it's only valid on a main residence and where the recipient of a home is a direct descendant (classed as children, step-children and grandchildren). This is gradually being phased in as follows and is what you'll get on top of your existing allowance:

For this tax year (2018/19) it's starting at £125,000 (meaning a total allowance of £450,000), rising by £25,000 each year till it reaches £175,000 (meaning a total allowance of £500,000) in 2020.

So now the maximum that can be passed on tax-free is £900,000 for married couples or those in a civil partnership, £450,000 for others. For singles, this is made up of the existing £325,000, plus the extra £125,000.

For couples, when the first one dies their allowance is passed to the survivor, so that £450,000 is doubled to £900,000.
In 2020, the tax-free amount will rise to £1 million for couples (made up of £325,000 x 2 plus £175,000 x 2) and £500,000 for singles (made up of £325,000 plus £175,000), as the main residence allowance rises.

Thanks for that! We would still have a IHT problem, but we knew that. You also have to take savings into account!

However, the fact the estate is bungalows means you do need professional advice. Ehen did you last see a new estate of bungalows? The owners of any surrounding bungalows might not be happy with houses overlooking them.

Even 10 dwellings will be looked at for traffic management and how traffic exits into another road.

I do know that builders take options on land and pay when pp is achieved. They do all the work though, and the more that has to be done, the less money is received by the owner.

Are you in the NW OP? I'd recommend speaking to a planning consultant too. A decent one should give you a free view over the phone on the chances of success.

There's no point wasting time or resources until you know whether there is a good chance of this happening or not.

I could make a recommendation if you are NW