Capital receipts reduced by costs of buying back dwellings
16.—(1) In this regulation and regulation 17—
“current year”, in relation to any capital receipts, means the financial year in which the capital receipts are received;
“new town corporation”, “housing action trust” and “urban development corporation” have the same meaning as in section 4 of the Housing Act 1985 (other descriptions of authority)(1);
“preceding year”, in relation to any capital receipts, means the financial year immediately preceding the current year; and
“shared ownership lease” means a lease of a dwelling granted on payment to a local authority of a premium which is calculated by reference to a percentage of the value of the dwelling or of the cost of providing it, and is not less than 25 per cent of that value or cost.
(2) In this regulation and regulation 17, an interest in land is a relevant interest if—
(a)it is the freehold interest or a leasehold interest in a dwelling and is not acquired pursuant to a compulsory purchase order;
(b)the freehold interest or a leasehold interest in the dwelling has previously been disposed of by the authority, another local authority, a new town corporation, a housing action trust or an urban development corporation; and
(c)the person from whom it is acquired is not a body of persons corporate or unincorporate.
(3) For the purposes of calculating the amount specified in regulation 10(4)(a), capital receipts derived from a disposal by a local authority of an interest in a dwelling, which meets the conditions specified in paragraph (4) must be reduced by —
X + Y
X is the amount of expenditure incurred by the authority on the repurchase; and
Y is the amount of the administrative costs of and incidental to the repurchase.
(4) For the purposes of paragraph (3), a disposal meets the conditions specified in this paragraph if—
(a)the authority makes the disposal by—
(i)conveying the freehold interest in the dwelling;
(ii)granting a lease of the dwelling for a term of not less than 125 years;
(iii)assigning its entire leasehold interest in the dwelling; or
(iv)granting a shared ownership lease; and
(b)where the interest disposed of is a lease other than a shared ownership lease, the authority estimates that not less than 90 per cent of the capital value of the lease has been, or is to be, received by them within one year of the date of the disposal.