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HMRC internal manual

VAT Construction

Dwellings - an explanation of terms: what ‘designed as a dwelling or number of dwellings’ means: how Note 2(c) is expressed in planning notices

You should not expect the wording of Note 2 (c) to appear as an explicit condition in the planning permission. Planners tend to adopt a form of wording that meets the particular circumstances of the case and often use the word ‘ancillary’ to tie use or disposal of the permitted dwelling to something else.

The following are examples of how a Note 2(c) prohibition has been expressed in a planning permission:

The living accommodation hereby approved shall be used as a self-contained unit of occupation, ancillary to the associated main household and shall not be severed as an independent and unconnected residence.

The annexe shall be used ancillary to the dwelling approved under application….and shall at no time be sold or let as a separate dwelling.

The reason for imposing a restriction in a planning notice is often a good aid to deciding if it amounts to a Note 2(c) prohibition. In cases of uncertainty as to whether or not a restriction amounts to a Note 2 (c) prohibition, the planners’ views should be sought by the trader.

Planning Permission Circular 11/95, issued by the Office of the Deputy Prime Minister, provides the following model planning condition where the creation of an additional dwelling would be unacceptable for planning purposes:

The extension (building) hereby permitted shall not be occupied at any time other than for purposes ancillary to the residential use of the dwelling known as [ ].

This model condition doesn’t meet Note 2(c).

Planning Authorities aren’t obliged to follow this model condition and can set their own condition. The Tribunal has examined alternative conditions in the cases below. Where a condition is framed in the same way, the Tribunal’s decision can be followed, except where indicated. If you are in any doubt about whether a covenant, planning consent or similar document meets Note 2(c), you should consult the Construction Unit of Expertise.

Philip Thompson (VTD 15834):

The living accommodation hereby approved shall be used as a self-contained unit of occupation, ancillary to the associated main household, and shall not be severed as an independent and unconnected residence.

Held: separate use prohibited - appeal dismissed.

Leslie Robert Hamilton (VTD 16020):

The annexe shall be used ancillary to the dwelling approved under application… and shall at no time be sold or let as a separate dwelling.

Held: separate use and separate disposal prohibited - appeal dismissed.

Douglas Stanley Ford (VTD 16271):

The barn conversion to form a granny annexe hereby permitted shall be occupied solely for purposes incidental to the occupation and enjoyment of ‘Poplars Place’ as a dwelling and shall not be used as a separate unit of accommodation.

Held: separate use prohibited - appeal dismissed.

J S Sherwin and R K Green (VTD 16396):

…not to sever the legal ownership of any part of the First Property the Second Property and the Third Property respectively by way of gift lease sale or other transaction nor to create any legal interest in any part of the First property the Second Property and the Third Property respectively save by a licence or lease of the workshop area…

Held: separate use and separate disposal NOT prohibited - appeal upheld Note - this appeal turned on how the word ‘respectively’ applied within the agreed covenant.

David and Louise Clamp (VTD 16422):

That the annexe shall only be used for ancillary accommodation in association with the main dwelling and for no other purpose whatsoever and in particular shall not be occupied as an independent unit of residential accommodation.

That neither the annexe nor the main dwelling shall be disposed of whether wholly or in part by way of gift lease sale or other transaction separately from the other nor shall any legal interest be granted, transferred or created so that any person becomes a tenant lessee or owner of the annexe without having a similar interesting the main building. 

Held: separate use and separate disposal prohibited - appeal dismissed.

Nick Hopewell-Smith (VTD 16725):

The… barn conversion shall only be used in a manner ancillary to or incidental to the use of the dwelling known as ‘Brundish Manor’ and for no other purpose.

Held: separate use prohibited - appeal upheld.

Note: The appeal was allowed on the grounds that the separate disposal of the barn wasn’t prohibited. We consider that this decision was incorrect and must not be followed.

Paul Henry Wiseman (VTD 17374):

The extension/annexe hereby approved, together with the existing dwelling shall be occupied as one unit for the accommodation of one household, except that this will not prohibit the occupation of the extension/annexe by an elderly dependant relative or relatives.

Held: separate use prohibited - appeal dismissed.

Oldrings Development Kingsclere Ltd (VTD 17769):

The Planning Permission didn’t prohibit separate use or disposal of the dwelling nor did it impose any conditions on use. Subsequent statements from the Planning Authority asserted that PP wasn’t granted for use as a dwelling. The Tribunal relied on the original PP and disregarded the later statements.

Held: separate use and separate disposal NOT prohibited - appeal upheld. 

Note: Don’t follow, but contact the Construction Unit of Expertise if a similar situation occurs.

John Charles Munnery (VTD 17903):

The building shall not be occupied at any time other than for purposes ancillary to the residential use of the dwelling… The reason is to ensure the proposed use remains ancillary to the principal use on the site. The use may otherwise give cause for objection having regard to applicable standards and guidelines.

Held: separate use prohibited - appeal dismissed.

Steven Lunn ([2009] UKUT 244 (TCC)):

The development hereby permitted shall only be used for purposes either incidental or ancillary to the residential use of the property known as Radbrook Manor and shall not be used for commercial purposes.

Held: separate use prohibited - appeal against finding of Tribunal allowed.

JFB and JR Sharples (VTD 20775):

… the freehold interest in the [cottages] shall not be sold, assigned or disposed away from that in the main [care] home.

Held: separate disposal NOT prohibited.

ME Wendels (TC 00737):

The occupation of the dwelling hereby permitted shall be limited to a person solely or mainly employed or last employed in the cattery business occupying the plot … or a widow or widower of such a person, or any resident dependent.

Held: separate use and disposal NOT prohibited - appeal upheld.

Note: Don’t follow, but contact the Construction Unit of Expertise if a similar situation occurs.

Ian Phillips (TC 01227):

That the house subject of outline planning permission reference… shall be occupied only by persons engaged in the management or operation of the business trading as Wester Brae Highland Lodges, together with family members.

Held: separate use and disposal NOT prohibited - appeal upheld.

Note: Don’t follow, but contact the Construction Unit of Expertise if a similar situation occurs.