I have a large Housing Association that has obtained planning permission for a housing scheme (houses and flats) but which also includes a flexible commercial/retail unit (Classes A1/A2/A3/B1 and D1 only). The question they ask is whether, as a Registered Charity, the have to pay CIL on the commercial unit. They intend to rent/lease this unit out for someone to use as a nursery. My initial view is that although the income they will receive from the letting of this unit will be ploughed back into the future provision of social housing, the people running the nursery (or for any of the other permitted uses) will themselves be making a profit which will not go to the Housing Association. Therefore they cannot claim Charitable Relief as they fall foul of Regulation 43 (b). Am I right? Your views would be appreciated.
43.— (1) An owner (C) of a material interest in the relevant land is exempt from liability to pay CIL in respect of a chargeable development if—
(a) C is a charitable institution; and
(b) the chargeable development will be used wholly or mainly for charitable purposes (whether of C or of C and other charitable institutions).
