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Suppose a developer enters into a build licence (containing a section 44A(1)(a) right) over a whole site (bare land without identified plots).
If the developer takes possession of say a third of the site, builds out and then directs conveyances of plots to third party occupiers – does an SDLT liability arise? Presumably not by reason of substantial performance of the agreement because possession only relates to one third of the site. But arguably yes to the extent of the directed conveyances because, to that extent, the contract has completed (sub-sale?).
If the developer then takes possession of the balance of the site, builds out and then directs conveyances of plots to third party occupiers – does an SDLT liability arise? If so, is it by reason of completion or substantial performance? If by reason of substantial performance then is that substantial performance of the original agreement (how would you get credit for SDLT paid on the first phase? – presumably the subject matter of the contract is still the whole site?) or a deemed agreement for the balance of the site?
You may find that SDLT is due on the full anticipated consideration (s51) and an application to defer on the balance of the site could be considered (s90). S44A does not have any connected party or market value provisions and so you might as an alternative think about rearranging how the developer goes about this so that for example the right to nominate purchasers is with say B2 for a small turn while B1 is rewarded with a building contract giving it the appropriate share of the profits.
