Section A - Introduction
Please use this Focus Note if you want to request that one project, i.e. a purchase (of a Manse) or redevelopment project is designated as a replacement project for another project, i.e. a sale (of a Manse).
Please note that it is Property Support who decide whether a project can be designated as a “replacement” under Standing Order 931(1)(ix). This is not a decision that can be taken by TMCP and TMCP Legal is not involved in the process as it is now handled entirely through the Consents Website.
Section B - Replacement projects
The consent of Property Support is required when Managing Trustees wish for a property project to be classed as a replacement project under Standing Order 973(1).
If the project satisfies the criteria for being a replacement project as detailed in the Criteria for Replacement Projects under SO973 (see point 40 on the list) adopted by the Methodist Council and is approved as a replacement project by the Property Support Team, then part, or all, of the sale proceeds (depending of the cost of the replacement project) will be exempt from Connexional Priority Fund Levy (“CPF Levy”).
Section C - Procedure for requesting a replacement project
If Managing Trustees want to request that a project is designated as a replacement project for another, this has to be done via the Property Consents Management System (Consents Website). The way to do this is as follows:
When the Managing Trustees log a project on the Consents Website i.e. a purchase project, they will be asked; “Is this project a replacement project?” If the Managing Trustees want the project to be considered as a replacement project they must put a tick in that field.
If Managing Trustees have any questions about how to request a project be considered as a replacement project through the Consents Website, please direct these queries to Property Support or the Web Applications Team if the issue relates to the Consents Website.
The Managing Trustees must enter the details of the project which is being replaced such as the sale project ID.
Once the details have been entered this will alert the Director of Property Support. The Director of Property Support can then consider both projects and decide whether consent can be given to a replacement project. The Director of Property Support will liaise with the Managing Trustees should further information be required.
If the Director of Property Support gives consent to a replacement project, the purchase and sales projects will then be linked via the Consents Website. Please contact the Director of Property Support for confirmation as to whether consent has been given.
TMCP Finance should be made aware of projects that are confirmed as a replacement project through the Consents website and will be able to process the sale proceeds accordingly. The CPF Levy will be taken on the sale proceeds and then refunded on the replacement project when you make a payment request for the “CPF levy refund.”
Please note that if there are any surplus sale proceeds, the CPF levy will be taken on this amount. Where the replacement project is a purchase, the CPF levy refund is only available on the purchase price, not on the costs of the purchase (legal or surveyor’s fees) or works that Managing Trustees intend to carry out following the purchase such as decorating or maintenance.
If you want one project to be considered as a replacement for another project and a decision needs to be made within a certain timescale so that you can ensure appropriate funding is in place, then please do contact the Director of Property Support to ensure that a decision is taken in good time. You may need a decision before exchange of contracts on a purchase or before you sign a building contract or commit to incurring significant expenditure on a redevelopment project so that you have time to make alternative funding arrangements if the CPF levy refund will not be available in time.
Section D - What happens if the sale has already completed?
If a sale has already completed and the sale proceeds have been sent to TMCP Finance, when the Managing Trustees log the project they want to be considered as a replacement project e.g. a purchase or redevelopment, they must select “CPF levy refund” on the funding tab and enter the refund amount. As the sale would have taken place already, the exact amount should be entered. If you do not know the exact amount please contact TMCP Finance.
Section E - What happens if the replacement project will “complete” before the sale?
If the purchase or redevelopment will “complete” before the sale, the Managing Trustees should select the funding type of where the monies are actually coming from i.e. “Circuit Funds (TMCP)” if coming from a Model Trust Fund or “Methodist Chapel Aid” if they are getting bridging finance etc. Please note that you must NOT select “CPF levy refund” as the funds are not yet available and the exact amount is unknown. Please do ensure that alternative funding arrangements are in place so that you have sufficient funds to proceed pending completion of the sale.
Section F - Where can Managing Trustees obtain help in relation to replacement projects?
Previously TMCP Legal would facilitate any request for a replacement project by liaison with the Conference Office (who previously considered requests for replacement project status). TMCP Legal no longer needs to be involved in the process of requesting permission for a replacement project, however TMCP Legal will continue to assist the Managing Trustees in confirming whether or not “other costs incurred by them” can be deducted from the sale proceeds in accordance with Standing Order 916(1)(i).
Please note that this document is to provide guidance and assistance to Managing Trustees and their professional advisers. This guidance note is general in nature, may not reflect all recent legal developments and may not apply to the specific facts and circumstances of any particular matter.
Also note that nothing within the documents and guidance notes provided by TMCP nor any receipt or use of such information, should be construed or relied on as advertising or soliciting to provide any legal services. Nor does it create any solicitor-client relationship or provide any legal representation, advice or opinion whatsoever on behalf of TMCP or its employees.
Accordingly, neither TMCP nor its employees accept any responsibility for use of this document or action taken as a result of information provided in it.
Please remember that Managing Trustees need to take advice that is specific to the situation at hand. This document is not legal advice and is no substitute for such advice from Managing Trustees' own legal advisers.
If you have any queries in relation to the guidance in this Focus Note please contact TMCP Legal for further assistance.