LOCAL TAXATION Flashcards
Can you tell me the definition of rateable value?
The amount equal to the rent at which it is estimated the hereditament might reasonably be expected to let from year to year on 3 assumptions – at AVD, reasonable sate of repair, FRI basis
Can you tell me what the 4 tenants of rateability are?
Actual, Beneficial, Exclusive and Transience
If you were allocated an office appeal to deal with, could you talk me through what you would look at in terms of the valuation and how you would go about valuing an office for rating purposes?
I would consider the rating manual and guidance. Step by step approach.
What is the role of the valuation officer, what is the statutory duty?
To collate and maintain a fair and accurate rating list.
Can you act as both expert witness and advocate at upper tribunal?
If it is a simplified procedure yes. If it is a standard procedure, then you can only be an expert witness.
Why is A/C rateable?
Included in the plant and machinery regulations. Rateable if not used mainly or exclusively as part of the manufacturing operations or trade processes.
What are the stages set out in Lotus & Delta Ltd & Culverwell V Leicester City Council 1976?
Subject rent is the starting point
The closer the rent is agreed to time, subject matter and conditions within the definition of rateable value, the more weight should be applied to it.
Rental evidence of similar properties.
Assessment of comparable properties.
Opinion can then be formed, weight to be attributed to differing types of evidence depending on nature of subject rent and degree of comparability
Where no rents available a eview of other assessment may be helpfil but more difficult to reject the evidence of actual rent.
What are the statutory assumptions for rateable value?
At the Antecedent valuation date
Reasonable state of repair
FRI lease
How would you help mitigate a clients rates liability?
By Utilising legal exemption and reliefs.
By appealing rate valuations form them
Arranging short term occupancy of vacant properties. Using the space for temporary activities thereby altering eligibility for full business rates.
What would you do if client was going out of business?
Suggest hardship relief – councils can reduce or cancel business rates bill. Council must agree that you would you be in financial difficulties without the relief and giving the relief is in the interest of local people.
What would you do if car parking spaces weren’t included within their rating assessment?
If contiguous add them in, if not make separate survey note. If industrial sometimes reflected in base price.
What are the restrictions on making appeals?
They have to be on a point of law.
What do you look for in MCCs?
Duration and severity and intensity. Severity is more relevant than duration as severity is valuable. matters affecting physical state of hereditament and locality
What evidence can an appellant provide to show disturbance?
Downturn in trade?
What are the VT procedures?
For the hearing, there is a clerk who deals with introduction and any preliminary matters from the parties, the appellant then gives their introduction as advocate and evidence as expert witness they then answer any questions from the panel and myself. I would then five introduction as advocate and evidence as expert witness then answer any questions from the panel or appellant. I would then sum up as advocate and the appellant sums up as advocate. The clerk will then close the hearing.
What is the clerks role during a hearing?
Responsible for providing advice to the panel which it requires to discharge it functions. Keep a note of evidence and submission to assist in drafting the decision. Must not make findings of fact or law but may assist the panel by reminding of the evidence and arguments from notes. May ask questions to clarify evidence any issues when invited to do so by the Chairman. Duty to assist unrepresented parties to present their case without becoming advocate
What do you look for in a lease for analysing rents for rating?
The date of the rent is effective. The terms. If there are connected parties. Any incentives – rent free, break clauses. Fit out costs. Review. New lease. Stepped rent.
What adjustments would you make for IRI?
Apply a 5% reduction for external repairs
What if you had 3 comps on different lease terms?
Adjust and analyse them so all on the basis of definition of RV
How would you value a pub for rating?
Gather 3 years accounts for consistency, work out the fair maintainable trade, deduct costs and expenses to get fair maintainable operating profit for a reasonably efficient operator, times the fair maintainable operating profit by years purchase to get the capital value
What guidance is there on pub valuations?
Valuation of public houses approved guide, rating manual, practice notes
How do you adjust for rent free periods, stepped rent?
Rent free- defer the rent for the period of the rent free at the YP and PV it back
Stepped rent – Capitalise the rents for the term until they increase to next step at YP and PV it back
What is a deletion?
Removing the property from the rating list. Property does not meet 4 tenants of rateable occupation or does not constitute a hereditament.
What did redevelopment involve?
Removal of roof, ceiling, walls. Replacement of existing windows. Stripping of accommodation
Office, Bristol - What evidence did the agent provide?
Floorplans pre and post redevelopment, photos of redevelopment works, before completion of finishing works and after completion of finishing works, planning consent notice, report containing explanation and reasoning
What is the newbigin case? What did it determine?
Considered an office building in Sunderland that was undergoing stripping out and refurbishment works to turn it into three new offices. It was held that the property was undergoing significant redevelopment and therefore the hereditament was incapable of beneficial occupation deeming it not rateable.
Is there any other case law regarding deletions/beneficial occupation?
Jackson v Canary Wharf – this clarified the decision set out in Newbiggin V Monk but it considered a modern office which was stripped out as part of periodic refurbishment between tenancies and was held the property was incapable of beneficial occupation and properties should be deleted rather than zero rated.
What does beneficial occupation mean?
Occupation must be of some benefit to the rateable occupier. Could be profit but not always, other reason is fulfilling a statutory requirement such as schools.
What is important to consider when acting as dual capacity role?
That as advocate you have a duty to client and as expert witness you have duty to the court
Can you act in dual capacity role?
If it is a simplified procedure yes. In more complex cases (such as requiring legal representation) the roles will be split.
What was the type 1 definition for the nursery?
Modern purpose built or substantially refurbished. Located in prime residential areas.
What was the type 2 definition for nurseries?
Urban/suburban solidly constructed buildings.
Is there any other types for nurseries?
Yes, nurserys were divided into 3 types in 2017. Type 3 was buildings converted from previous use in sparsely populated rural areas.
Why did they want it valued as a type 2?
Because they felt the property met the definition of a type 2 nursery and should be valued at a lower rate per m2
Day Nursery - What did you find on you inspection of the property?
Property was located off rain road on edge of village/town. The property had parking. Outdoor play space. Internally had been substantially refurbished to include facilities for children such as child height sinks, toilets. Non slip and hardwearing floor throughout the property.
What construction was the nursery?
Edwardian building – red brickwork with quoins, slate hipped roof, paned sash windows.
Why did you feel the nursery met the type 1 definition?
From my inspection, I felt the property had been substantially refurbished and it was located on a main road, close to the A4 which links to M5 and central Bristol. Public transport within 10-15 mins. Surrounded by residential properties
Nursery - What comparable evidence did you consider?
I had regard to other nurseries locally that had been categorised as type 1 nurserys and how these compared to the subject. I also reviewed the evidence submitted by the agent which was type 2 nurseries.
Nursery - What did you advise the tribunal?
I advised the tribunal that the nursery was correctly valued as a type 1 and that the existing rateable value was reasonable.
What is tone?
The general range of comparable evidence setting the tone. Generally established level of value via settlements.
Is there any caselaw in relation to tone?
O’Brien V Harwood (vo) 2003 established that there are three stages leading to the tone of the list. New rating list – entries carry little weight, opinions of value of valuation officer, unchallenged and untested by negotiation. 2n stage – over time assessments challenge and agreed or determined. 3. Stage where enough assessments have been agreed or determined or unchallenged to establish a pattern of values – tone of the list.
How old was the subject – day nursery?
1900 – early 1900s.
Why does rental evidence have an impact on rateable value?
As the definition of rateable value is the amount equal to which the hereditament would be reasonably let from year to year and therefore always trying to consider what the reasonable amount would be at the antecedent valuation date.
What are the implications of them withdrawing?
That they are unable to make a challenge on the same grounds and they are unable to progress to appeal
What is the material day?
The day we take all physical factors affecting the property and locality into account.
What is the effective day?
The date when rate liability starts, stops or changes. The day of the event.
What is the antecedent valuation date?
Sets the date for non-physical factors such as levels of rental value, economic factors.
What is the difference between advocate and expert witness?
Advocate has duty to client, expert witness has duty to court
Nursery - What was the outcome of the appeal?
The VT agreed with appellant that the nursery should be valued as a type 2
Nursery - What was the impact of the valuation at VT?
The valuation was reduced at a lower price per m2.
Are you aware of any guidance from RICS when acting at VT?
Surveyors acting as advocates 2nd edition, Feb 2017 – details conduct and duties of advocate
Surveyors acting as expert witness, 4th edition, Feb 2023 – details general duties, advice and questions to expect
Did you consider any rental evidence for the industrial in Carterton?
They hadn’t provided any rental evidence. I did however cross check the subject rent with the rateable value
Carterton - Why did you consider assessment evidence?
Time of the list, at this stage in the list put more weighting on this
Carterton - Why didn’t you inspect the property?
The case had already been through check where plans of the property had been agreed. The agent had also provided photos of the property within their submission and I was able to gather evidence from my desktop review and therefore felt this was sufficient
