Local Taxation

Question 1

Key legislation for Rating?

Answer 1

Local Government Finance Act 1988.

Question 2

What is transitional relief?

Answer 2

Tapers large increases in RV as a result of revaluation between lists.

Question 3

When is the next list due following 2017?

Answer 3

Brought forward from 2022 to 2021 - now 3 yearly revaluations as per the DCLG. AVD will be 01 April 2019

Question 4

What statutory instruments to the LGFA 1988 are you aware of?

Answer 4

• NDR Regulations 2009 - grounds of appeal.
• Valuation for Rating (P&M) Regulations 200.
• Valuation Tribunal for England Regulations 2009

Question 5

What is the definition of RV and where can I find it?

Answer 5

para 2 schedule 6 of the LGFA 1988;

the amount equal to the rent which it is estimated the hereditament might reasonably be expected to let from year to year on these assumptinos -

• tenancy begins on the day by which the determinatino is to be made;
• hereditament is in a reasonable state of repair.
• tenancy is on an FRI basis.

Question 6

What is PICO?

Answer 6

Property in Common Occupation Act 2018. Reversal of Mazars, if two properties are contiguous and not wholly used for seperate purposes they can be merged. Wiring between floors and common areas can be ignored as long as touching.

Question 7

What recent case law are you aware of?

Answer 7

Trillium v Hewitt - issues of demand for vacant office unit, SC looked at values in the locality of similar quality office units and determined a similar valued, property was occupied at the material day.

Kingsway vs Westminster County Council - valid service of completion notices.

Iceland vs Berry - treatment of AC units for cold store units in retail premises.

Jackson vs Canary Wharf - leading case on repair, office unit held to be not capable of beneficial occupation therefore a nominal RV held.

Question 8

What do you know about Lotus and Delta?

Answer 8

Shoe shop in Leicester. Rent £11,000. Lands Tribunal held for a figure of £12,000.

Case set out 6 propositions;

• actual rent is the starting point
• closer the rent to the statutory definition the more weight it carries
• where rents are available on similar properties they are also relevant
• also relevant are comparable assessments
• in light of the evidence available an opinion of value can be formed
• if no other rents a review of comparable assessments may be helpful, but it’s more difficult to reject the actual rent

Question 9

What is the leading case r.e. mode and category?

Answer 9

Williams vs Scottish and Newcastle - regards the use at material day, cannot be considered as wholly different use from that at MD.

Question 10

What can you tell me about PS2 NDR Appeals for Rating Lists before 2017?

Answer 10

10 week date - agree facts
8 weeks - reg 17
6 weeks - appellant case submission
4 weeks - respondent case submission
2 weeks - appellant sends case papers to VT

Question 11

What is the contractors approach to valuation?

Answer 11

Adopted for specialised property where there is limited market information.

5 stages;

Estimated Replacement Cost; based off size x build costs of modern equivalent asset

Adjusted replacement cost;
adjustments made for age and obsolescence

Estimated land value

Apply stat decap rate

STAND BACK AND LOOK

Question 12

Tell me about the Gallagher vs Read case.

Answer 12

Health centres and surgeries held not to be arms length transaction, limited market evidence available therefore contractors approach determined and lower stat decap rate to be adopted.

Question 13

Tell me about completion notices.

Answer 13

Horizon (Leicester CC v Delph) and Kingsway case leading precedent. Completion noitces served by BA when proeprty ready to be brought into rating VO then inspects and rates off the back of completion notice served. Horizon case outlines role of the VO and BA. Kingsway case outlines the valid service of a completion notice.

Question 14

What are serviced offices?

Answer 14

Purpose built or in converted buildings where landlord makes office/suite available to individual users, typically let on short term agreements. Office policy to take a 60/40 split for serviced element and bricks and mortar, in the Wythenshawe case I was provided with a breakdown of the rental details which alligned with the 60/40 method proposed.

Question 15

What are the 4 P&M classes and reguulations?

Answer 15

Power
Services
Rateable infrastructures
Process Plants

Rateable if listed in the Plant and Machinery regulations 2000.

Question 16

What is the name of the City Duck Case?

Answer 16

Scottish and Williams vs Newcastle

Question 17

You valued a vacant nursery, did you advise on empty rates relief?

Answer 17

No, empty rates relief can be applied in the first 3 months to a BA, hereditament was not new or being actively let/sublet therefore didn’t meet the criteria for empty rates relief

Question 18

How is the statutory decap rate determined?

Answer 18

Based on covenant strength. Education and healthcare facilities much more secure tenants compared to other property classes hence lower decap of 3.33%

Question 19

What rating exemptions are you aware of?

Answer 19

places of religious worship - need certificate
places used for training and welfare of disabled people
agricultural land and buildings including fish farms

Question 20

What is charitable relief

Answer 20

charities and community amateur sports clubs are eligible for charitable rating relief up to 80% - contact BA

Question 21

Is there RICS guidance regarding the contractors valuation method?

Answer 21

RICS GN Contractors Basis of Valuation of Rating Purposes

Question 22

Any other mode or category case law?

Answer 22

Walker vs Railex System, examined the rebus principle and mode or category of occupation

Question 23

What is the receipts and expenditure method?

Answer 23

Used where no rents available, generally for properties working towards a profit e.g. pubs

NET RECEIPTS

LESS WORKING EXPENSES

DIVISIBLE BALANCE (NET PROFIT)

LESS TENANTS SHARE

= RENT