Section A - Introduction

This Focus Note is to be read in conjunction with the Sale and/or Purchase Guidance for Managing Trustees. 

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).

Section B - Replacement projects

The consent of the Conference Office 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 replacement project guidance produced by the Connexional Grants Committee and is approved as a replacement project by the Conference Office 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:

Step 1:

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.

Step 2:

The Managing Trustees must enter the details of the project which is being replaced such as the sale project ID.

Step 3:

Once the details have been entered this will alert the Conference Office. The Conference Officer for Legal and Constitutional Practice can then consider both projects and decide whether consent can be given to a replacement project. The Conference Office will liaise with the Managing Trustees should further information be required.

Step 4:

If the Conference Office gives consent to a replacement project, the purchase and sales projects will then be linked via the Consents Website. Please contact the Conference Office for confirmation as to whether consent has been given.

Step 5:

TMCP Finance should be made aware of projects that are confirmed as a replacement project 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 Conference Office 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?

If Managing Trustees do experience any difficulties requesting replacement project status then they should contact the Consents Team.

Previously TMCP Legal would facilitate any request for a replacement project by liaison with the Conference Office. TMCP Legal no longer needs to be involved in the process of requesting permission for a replacement project, but 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).

Disclaimer

 

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.