Total Extinguishment

Total extinguishment is a Head of Claim under compulsory purchase order compensation falling under Rule 6 of Section 5 of the 1961 Land Compensation Act.

Businesses can oblige an Acquiring Authority to acquire their business interest in two sets of circumstances:

  • That the business claimant qualifies under Section 46 of the Land Compensation Act 1973.
  • That as a direct result of the compulsory purchase order, their business has not been able to relocate.

The Section 46 route sets out four separate qualifications for a business to be able to claim total extinguishment:

  • The claimant must be over the age of 60.
  • All other shareholders in the business (with the exception of the claimant's spouse) must be over the age of 60.
  • That the rateable value on the premises occupied by the business must be below £34,800.
  • That no part of the business' goodwill has been sold.

The second route whereby a claim can be submitted for total extinguishment is in circumstances where a business has been unable to relocate. Under such a route, the claimant must be able to prove that all reasonable endeavours have been used to try and relocate. Often an Acquiring Authority will put the claimant under a strict burden of proof in order to validate such a claim.

A total extinguishment route can provide closure for a claimant and also be a source of significant compensation. Roger Hannah & Co can provide professional advice both on the claims for total extinguishment together with assistance as to the level of a business' value. In certain circumstances, we would also engage forensic accountants as part of the exercise in assessing the value of the loss suffered by the claimant.

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