Charities developing land need to fully understand the likely costs involved, as well as the potential benefits.

One of the possible costs is the payment of Community Infrastructure Levy (CIL). In many circumstances charities will get relief from CIL, but the development needs to be properly structured and the right process followed.

How is CIL worked out?

Each local authority should by now have a charging schedule for CIL, which sets out a rate payable per unit area of new development.

When planning permission is granted for a development attracting CIL, the planning authority will issue a liability notice setting out how much CIL is payable.

When is CIL payable?

CIL is generally payable on commencement of a development in respect of which a liability notice has been issued. If payment is not made on time then the local authority can issue surcharges and penalties, and must charge interest on overdue sums. There is also scope for the local authority to issue a stop notice requiring development to cease until the levy is paid.

What are the conditions for charity relief from CIL to apply?

To qualify for any relief from CIL the claimant must be a charitable institution (which includes exempt charities, not just those registered with the Charity Commission), and must own a 'material interest' in the relevant land, which means either the freehold or a lease of at least seven years.

Mandatory relief from CIL

If the conditions above are met, CIL relief is mandatory (subject to state aid issues - see below) if the development will be used wholly or mainly for charitable purposes.

It is worth noting that the use to which the development should be put can include other uses which are in law charitable alongside use falling within the specific charitable objectives of the charity which owns the land.

Discretionary relief from CIL

If the general conditions for relief are met, there is also discretion for the charging authority to give relief for developments that will be held by a charity, or charities, as an investment, the profits from which will be applied to charitable purposes.

State aid issues

Mandatory relief is not available where to grant it would constitute state aid, i.e. an advantage granted that could potentially distort competition and trade within the European Union (EU).

However, where there is a concern about this the charging authority has discretion to grant relief, provided that the state aid would not be notifiable (broadly, where its value is under €200,000 or other particular tests are met).

Timing of claim for relief

The relief must be claimed and acknowledged by the charging authority as valid prior to the commencement of the development, not necessarily at the point of getting planning permission. This is an important consideration where planning is obtained prior to land being transferred to the charity; there is still scope to obtain the relief.

Clawback of CIL relief

It is important to note that if a development where charity relief from CIL was claimed becomes ineligible for the relief within seven years (most obviously on sale) there is full clawback of the relief. Charities selling land that they have developed should make sure that they pass the risk on this point to the purchaser, or that it is factored into the sale price.


CIL is an important consideration for charities when structuring a development project to ensure that they have minimal liability.

However, there may be circumstances where the levy is unavoidable or other considerations are more important.

You can hear more on CIL and the other issues for charities developing land at our charities developing land - what are the issues? seminar on 16 May.