Appendix 2: examples - Regulation 115 apportionment of liability
Source: gov.uk (2025-03-21)

The Valuation Office Agency's (VOA) technical manual for Community Infrastructure Levy.

The following examples are based on the rates of Community Infrastructure Levy (CIL as below:

Residential development - £ 50 per square metre (m2) GIA

Office development - £ 40 per m2 GIA

Industrial development - £ 30 per m2 GIA

These rates are for illustrative purposes only.

The instalment examples are for illustrative purposes only. Every local authority will adopt, and may regularly change, their own instalment and threshold regimes.

The examples are assumed to take place within a year of the Charging Schedule being adopted unless otherwise indicated.

Example 1

Planning permission for:

Offices – GIA 1,000m2

10 detached houses – GIA 2,000m2

GIA of chargeable development = 3,000m2

CIL calculation:

The developer defaults after 180 days having paid two instalments leaving £70,000 outstanding and has sold the land to another developer but has not submitted a liability transfer notice. The collecting authority then apportions the outstanding amount between the owners of the material interests in the land in accordance with the apportionment formula in regulation 34. At the date of the apportionment one house had been completed and sold to a third party, with the remaining development in the process of construction and owned by the developer.

Apportionment:

At the date of the apportionment the houses were each worth £300,000 and the offices £1.2 million, assuming they had all been completed. The value of the developer’s interest in accordance with regulation 34 is therefore £3.9 million (i.e. 9 houses x £300,000 = £2.7 million + £1.2 million for the offices). The value of the interest in the house that has been sold is £300,000. The total value of both interests is £4.2 million (i.e. £3.9 million + £300k).

The developer is liable for CIL as follows:

£70,000 x (£3.9 million ÷ £4.2 million) = £65,000

The owner of the house is liable for CIL as follows:

£70,000 x (£300,000 ÷ £4.2 million) = £ 5,000

Example 2

Planning permission for:

A 10 storey office building with a GIA of 5,000m2

CIL calculation:

5,000m2 @ £40 per m2 = £200,000

The development has commenced but no one has assumed liability for the payment of CIL. The collecting authority then apportions the CIL payment between the owners of material interests in the relevant land in accordance with the apportionment formula in regulation 34.

The freehold interest in the site is owned jointly by Mr Jones and Mr Smith in equal shares and they have let the site on a 125 year lease to a developer at a ground rent representing 10% of the market rental value of the completed offices.

Apportionment:

At the date of the apportionment the value of the freehold subject to the lease is £2.15 million and the value of the 125 year lease is £19 million, both valuations carried out on the assumption that the offices had been completed. The total value of both interests is £21.15 million (i.e. £2.15 million + £19 million).

The freeholders, Mr Jones and Mr Smith, are liable for CIL as follows:

£200,000 x (£ 2.15 million ÷ £21.15 million) = £20,330

The developer is liable for CIL as follows:

£200,000 x (£19 million ÷ £21.15 million) = £179,670

Comment

Mr Jones and Mr Smith are joint owners of the freehold interest but in accordance with regulation 37(1) the interest to be valued is the freehold entirety and not the undivided half shares of each owner.

Example 3

Planning permission for:

A terrace of 10 industrial units each with a GIA of 200m2. The total GIA of the chargeable development is 2,000m2.

CIL calculation:

2,000m2 @ £30 per m2 = £60,000

The development has commenced but the developer who has assumed liability to pay CIL in respect of the whole development has not paid the first instalment due 60 days after commencement and cannot be traced, despite going through the courts. The collecting authority then apportions the CIL payment between the owners of material interests in the relevant land in accordance with the apportionment formula in regulation 34.

The freehold interest in the land on which 4 of the units are being constructed is owned by Mr Jones. The freehold interest in the land on which the remaining 6 units are being constructed is owned by Mr Smith. The whole site was let to the developer on a long lease but the lease has been forfeited before the date of apportionment.

Apportionment:

At the date of the apportionment the freehold value of each of the units if fully completed is £120,000. The value of Mr Jones’ interest is £480,000 and the value of Mr Smith’s interest is £720,000. The total value of both interests is £1.2 million (i.e. £480,000 + £720,000)

The freeholders are liable for CIL as follows:

Mr Jones

£60,000 x (£480,000 ÷ £1,200,000) = £24,000

Mr Smith

£60,000 x (£720,000 ÷ £1,200,000) = £36,000

Comment

Mr Jones and Mr Smith are joint owners of the site but they each own the freehold interest in a physically different part of the site. Regulation 37(1) is not therefore relevant in this example.

Example 4

Planning permission for:

A 6 storey block of 20 flats with a total GIA of 1,600m2

CIL calculation:

1,600m2 @ £50 per m2 = £80,000

The developer defaults after 240 days having paid two instalments, leaving £40,000 outstanding and having sold the freehold to a third party but has not submitted a liability transfer notice. The collecting authority then apportions the outstanding amount between the owners of the material interests in the land in accordance with the apportionment formula in regulation 34. At the date of the apportionment 5 flats had been sold on 125 year leases at fixed ground rents of £100 per annum and the remaining 15 were under construction.

Apportionment:

At the date of the apportionment the value of the 125 year leases in each of the flats is £100,000. The total value of leasehold interests in the flats sold is therefore £500,000 (i.e. 5 flats at £100,000).

The value of the retained freehold interest in those flats sold (i.e. the right to receive the ground rent for 125 years) is £2,000 per flat. The value of the freehold interest in those flats is therefore £10,000 (i.e. 5 flats at £2,000).

Assuming the development is complete the value of the freehold interest in the remaining flats is £1.53 million (i.e. 15 flats at £102,000).

The total value of the freehold interest is £1.54 million (i.e. £10,000 + £1.53 million).

The total value of all the interests is therefore £2.04 million (i.e. £500,000 + £1.54 million).

The freeholder is liable for CIL as follows:

£40,000 x (£1,540,000 ÷ £2,040,000) = £30,196

The individual flat owners are each liable for CIL as follows:

£40,000 x (£ 100,000 ÷ £2,040,000) = £1,960.80

Example 5

Planning permission for:

A development of two pairs of semi detached houses each with a GIA of 125m2.

GIA of chargeable development = 500m2.

CIL calculation:

500m2 @ £50 per m2 = £25,000

The developer defaults after 180 days having paid two instalments, leaving £12,500 outstanding and has sold the freehold to a developer but has not submitted a liability transfer notice. The collecting authority then apportions the outstanding amount between the owners of the material interests in the land in accordance with the apportionment formula in regulation 34. At the date of the apportionment one of the houses had been sold to Mr Jones and one to Mr Smith. Mr Smith immediately extended his house under permitted development by adding a 20m2 conservatory which had been completed by the date of apportionment. The remaining houses were still under construction.

Apportionment:

At the date of the apportionment the value of the houses assuming they were completed is £150,000, with the exception of the house owned by Mr Smith which is worth £165,000.

Assuming the houses are completed, the value of the developer’s interest is therefore £300,000 (i.e. 2 x £150,000).

The total value of all the interests is £615,000 (i.e. £150,000 + £165,000 + £300,000).

The freeholder is liable for CIL as follows:

£12,500 x (£300,000 ÷ £615,000) = £6,098

Mr Jones is liable for CIL as follows:

£12,500 x (£150,000 ÷ £615,000) = £ 3,049

Mr Smith is liable for CIL as follows:

£12,500 x (£165,000 ÷ £615,000) = £ 3,353

Comment

Mr Smith would not normally have been liable for CIL on the extension as its GIA was below 100 sq m (regulation 42). However, it formed part of the property at the date of apportionment and has to be included in the value of the material interest at the date of apportionment.

Example 6

Planning permission for:

A 6 storey office building with a GIA of 12,000m2

CIL calculation:

12,000m2 @ £40 per m2 = £480,000

The development has commenced but no one has assumed liability for the payment of CIL. The collecting authority then apportions the CIL payment between the owners of material interests in the relevant land in accordance with the apportionment formula in regulation 34.

The freehold in the site is owned by Mrs Jones and she has let part of the site on a 125 year lease to a developer at a ground rent representing 15% of the market rental value of the office building, subject to 5 yearly rent reviews. The part of the land that has not been let is a potential access to an adjoining area of land that has hope value for future office development.

Apportionment:

At the date of the apportionment, assuming the office building is completed, the value of the freehold subject to the lease is £4 million and the market value of the lease is £22 million. In addition, the potential access land that has not been let to the occupier has a value of £2 million.

The total value of the freehold interest is therefore £6 million.

The total value of all the interests is £28 million (i.e. £6 million + £22 million).

The freeholder is liable for CIL as follows:

£480,000 x (£ 6,000,000 ÷ £28,000,000) = £102,857

The developer is liable for CIL as follows:

£480,000 x (£22,000,000 ÷ £28,000,000) = £377,143

Comments

Regulation 34(4) provides that the value of a material interest is the price that it might reasonably be expected to obtain if sold on the open market on the day the apportionment takes place. In addition it has to be assumed that the chargeable development has been fully completed the day before the apportionment takes place. The market value of the land will reflect not only the value of the chargeable development but the value for any undeveloped parts that have potential for further development.

Example 7

Planning permission for:

10 detached houses with a total GIA of 2,000m2

CIL calculation:

2,000m2 @ £50 per m2 = £100,000

The developer defaults after 120 days having paid one instalment, leaving £75,000 outstanding and has sold the land to another developer but has not submitted a liability transfer notice. The collecting authority then apportions the outstanding amount between the owners of the material interests in the land in accordance with the apportionment formula in regulation 34. At the date of the apportionment one house had been sold to Mr Smith, a further one was sold subject to contract to Miss Jones, with the remaining development in the process of construction and owned by the developer.

Apportionment:

At the date of the apportionment and assuming the houses were completed each of them would have had a value of £300,000. As Miss Jones has not completed her purchase she does not yet own a material interest in her house.

The value of the developer’s interest is therefore £2.7 million (i.e. 9 x £300,000).

The total value of all the interests is £3 million (i.e. £300,000 + £2.7 million).

The developer is liable for CIL as follows:

£75,000 x (£2,700,000 ÷ £3,000,000) = £67,500

Mr Smith is liable for CIL as follows:

£75,000 x (£300,000 ÷ £3,000,000) =£7,500

Miss Jones has no CIL liability.

Comments

An apportionment is only required if there is more than one material interest in respect of the relevant land. Regulation 4(1) defines a material interest as being a legal estate that is either the freehold or a lease having more than seven years unexpired on the relevant date. Although Miss Jones has a binding contract to acquire the freehold the sale has not been completed at the date of apportionment so she does not yet actually own the freehold estate.

Example 8

Planning permission for:

A detached industrial building with a GIA of 7,500m2

CIL calculation:

7,500m2 @ £30 per m2 = £225,000

The development has commenced but no one has assumed liability for the payment of CIL. The collecting authority then apportions the CIL payment between the owners of material interests in the relevant land in accordance with the apportionment formula in regulation 34.

The freehold in the site is owned by a developer who has let it to an occupier on a 25 year lease at a rent of £300,000 per annum being 50% of the market rental value of the completed building, with 5 yearly reviews on the same basis. The occupier paid a premium for the grant of the lease shortly before the date of apportionment.

Apportionment:

At the date of the apportionment the collecting authority has valued the freehold subject to the lease at £4.3 million and the leasehold interest at £2.3 million (i.e. a total values of £6.6 million).

The freeholder appealed against the apportionment and adopted figures of £3.7 million and £2.7 million respectively (i.e. a total value of £6.4 million).

The freeholder is liable for CIL as follows:

£225,000 x (£4.3 million ÷ £6.6 million) = £146,591

The leaseholder is liable for CIL as follows:

£225,000 x (£2.3 million ÷ £6.6 million) = £78,409

OR

The freeholder is liable for CIL as follows:

£225,000 x (£3.7 million ÷ £6.4 million) = £130,078

The leaseholder is liable for CIL as follows:

£225,000 x £2.7 million ÷ £6.4 million = £94,922

Comments

The value of the material interests must be decided on the facts of the case having regard to the evidence submitted by the parties. As the freeholder is appealing against the collecting authority’s apportionment on the grounds that the valuations they have used in the apportionment formula are incorrect, the onus of proof is on the freeholder.

The value of the material interest to be used in the apportionment formula must be decided on the facts of the case having regard to the evidence submitted by the parties. This evidence may, for example, include professional valuations, details and analysis of comparable evidence, the premium paid by the leaseholder etc.