Revenue investigation delays Hove redevelopment

Sussex's ambitious plans for the redevelopment of Hove have been thrown into doubt by an Inland Revenue investigation into the £12 million legacy bequeathed to them by former president Spen Cama.

A report in The Times suggested that the windfall could be reduced by as much as £5 million if it is subjected to corporation or inheritance tax. "It would have a massive impact on our plans," Gus Mackay, the chief executive, told the paper.. "It would change the scope of our development, so we are seeking clarification. We believe Spen's legacy was an unsolicited gift and not taxable, but an investigation could take two weeks, two months or two years."

The legacy was put into trust and so the county hope that they will be entitled to the full amount. Work was to have started later this month but that has now been put on hold.

The legacy has already had a marked impact on the county's finances. The county is expected to report an operating loss of more than £300,000 in 2007 but interest on Cama's legacy means that figure will be boosted to a surplus of over £200,000.

Cama, a barrister who died in 2001, also left £7 million to a local league side.