Local Taxation L3

Question 1

What is Rateable Value?

Answer 1

Likely rent a property could be reasonably expected to obtain in 1 year

Question 2

What are the 3 assumptions for rateable value?

Answer 2

1. Let on open market at AVD
2. Property is assumed to be in a reasonable state of repair
3. The tenant is responsible for paying all costs of repair and insurance (FRI lease)

Question 3

What is land remediation relief?

Answer 3

A tax relief which applies to derelict or contaminated land in the UK companies can claim up 2A 150% corporation tax relief for expenditure in remediating certain contamination or derelict sites including Japanese knotweed

Question 4

Give me some exemption examples

Answer 4

Agricultural land and buildings
fish farms
places of public worship
sewers and accessory belonging to sewers.
property used for disabled
parks

Question 5

When would a property apply for religiosity exemption

Answer 5

Property needs to be available for public religious worship

Question 6

What is ‘Rebus Sic Stantibus’? Explain its two limbs.

Answer 6

1. Use limb = “Taking the thing as it is” and valuing a hereditament as it stands in its existing use
2. Physical limb = when looking at the ‘reasonable person’ to decide if proposed works are excessive or not.

Question 7

What was the leading case to define a hereditament?

Answer 7

Gilbert v Hickenbottom.

Woodway v Mazzars superseded this lead case.

Question 8

What is the material date?

Answer 8

The day on which we consider the physical state of the property and its locality

Question 9

What is the effective date

Answer 9

The date the rateable value can start stop will be amended the effect of date changes to reflect the date of a change or an event

Question 10

What are 4 ingredients needed for rateable occupation?

Answer 10

Actual occupation
Beneficial occupation
Exclusive occupation
Transient (not too)

Question 11

What is rental analysis?

Answer 11

Taking misleading Rents and adjusting them as though a ‘normal’ deal had been done. E.g. adjusting for rent free periods or premiums as incentives.

Question 12

What might you look for in a lease?

(I.e. that we need to make adjustments for)

Answer 12

Rent free periods
Reverse premiums
Connected parties
Stepped Rents
Living accomodation
FRI basis or not
Length of a lease
Time until renew

Question 13

What is AVD?

Answer 13

Antecedent Valuation Date.

The fixed valuation date used to determine the estimated annual rent a property would reasonably expect to obtain on the open market

Question 14

What is a nil increase?

Answer 14

When a rent does not increase at review on an upward only clause.

This often indicates a useless rent as it means that the rent is below market rent.

Question 15

What leading case law set the 4 tenets of rateable occupation?

Answer 15

Laing (J) & Son V. Kingswood

Question 16

What is Jackson v Canary Wharf case about?

Answer 16

Assessment should be deleted if substantial refurbishment works are carried out in the property (not nominal rent)

Question 17

What is the definition of domestic property? And where can you find it?

Answer 17

Section 66 (I) of the LGFA 1988.

A premises is domestic if…
Used wholly for the purposes of living accomodation.
A yard, garden, outhouse or appertenance belonging to or enjoyed with a property which is used wholly for living accomodation.
A private garage with either floor area of 25m2 or less, or used wholly for accomodation of a private motor.
Private storage premises, wholly for storage of domestic articles.

Question 18

What is the leading case law for Rebus Sic Stantibus?

Answer 18

FirMill Ltd v Royton UDC and Jones

Question 19

How many classes are plant a machinery divided into and what are they?

Answer 19

Power - generator/renewable power

Services - lighting/ security systems

Movement - lifts/rail tracks

Named structures -masts/storage tanks

Question 20

Would a bowls pitch in a park be exempt?

Answer 20

No. Because it isn’t openly available to the public

Question 21

What is the tone of the list? & what is the leading case law with three stages established?

Answer 21

O’Brian v Harwood

1. When a new rating list is created there is little weight as this is VO opinion these are unchallenged and untested.
2. Assessments will be challenged overtime, and agreed or determined by Tribunal. Accepted by lack of challenges.
3. Finally a stage is reached where enough assessments have been agreed or unchallenged and determines a pattern of values, or tone of the list

Question 22

What are the methods of valuation used in Rating?

Answer 22

Receipts and expenditure

Contractors

Comparable

Question 23

What is the main legislation for P&M?

Answer 23

Valuation for rating (Plant and Macinery) (England) Regulations 2000

Question 24

What is MCC?

& what are the ingredients to establish an MCC?

Answer 24

Material Change in Circumstance

Material Day is the point in time when the physical state of the property and its locality are taken into account.

Includes…
Matters affecting the enjoyment or physical state of the property.
Mode or category of occupation of the hereditament.
Use or occupation of other premises situated in the locality.
Matters affecting physical state of the locality.

Question 25

Would answer the administrative premises be exempt in the place of worship

Answer 25

Yes.

Question 26

Name one case law relating to exemptions

Answer 26

Duxbury v Bell, 1992

Question 27

Where can you find out about exemptions

Answer 27

LGFA 1988 - Schedule 5

Question 28

Define a hereditament

Answer 28

A single unit of property which will have a separate entry to the list. For a single hereditament to exist it must be: Capable of beneficial occupation Of an exclusive occupier exclusive use and single geographical location

Question 29

Can you explain not to transient

Answer 29

Has a degree of permanency

Question 30

Explain paramount

Answer 30

The person who has control over the use to which the others may make of the property.

Question 31

What is the current National Small Business Relief Multiplier

Answer 31

49.9p for small businesses National is 55.5p

Question 32

What is AVD and why do we need it?

Answer 32

Antecedent Valuation Date Needed to make it fair for all the businesses so it is valued at the same date.

Question 33

What is the lead case for AVD?

Answer 33

K Shoe Shops Ltd. V Hardy (VO) and Westminster City Council.

Question 34

Where can you find the definition of RV, and what is the leading case?

Answer 34

Schedule 6 to LGFA 1988, as amended by the Rating (Valuation) Act 1999. Lead case - westminster city Council v Southern Railway Co. And WHSmith and son 1936.

Question 35

What reliefs do you know?

Answer 35

Small business relief = RV < £12,000 100% Relief. Then staggered above that so < £15,000 up to 100%relief. Charitable relief = up to 80%, can be up to 100% Empty property relief = 3 months / up to 6 months for warehouses and factories. Vacant for a reason i.e. H&S.

Question 36

What does the Garton v Hunter VO (1969) state?

Answer 36

Lord Denning said we admit all relevant evidence. The goodness or badness of it goes to weight, and not to admissibility.

Question 37

What are the best to worst selection of waiting on rental evidence

Answer 37

1. Open market letting 2. Agreed lease renewal 3. Rent review 4. Expert determination 5. Opinion evidence 6. Court order of a lease renewal 7. Arbitrators decision

Question 38

What new legislation was introduced in 2018 regarding heraditaments?

Answer 38

Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Act 2018. The act makes provision where 2 or more hereditaments occupied or owned by the same person and are contiguous can be treated for non domestic rates purposes as one single hereditaments.

Question 39

Card tropics v Sykes (VO) [2020] UKSC 21

Answer 39

The Supreme Court considered whether the sites of Automatic Teller Machines (ATMs) in supermarkets were: A) capable of being identified as separate assessments B) in rateable occupation of the host store or the ATM operator. Concluded host stores had not sufficiently parted with possession and therefore the host remained in control and in rateable occupation of the site of the ATM.

Question 40

Talk me through Monk & Newbigin case what did it establish?

Answer 40

Where a rated property is in capable of beneficial use, having been subjected to significant building works kt should be deleted from the assessment. Or the Rateable Value reduced to a nominal value. Lightweight refub/refits do not qualify for a reduction of rating assessment.

Question 41

Main case law to weigh comparables? And it's 6 propositions.

Answer 41

Lotus and Delta 1) the rent of the subject property should be taken as the starting point. 2) more closely to AVD the more weight it gives. 3) Rents of similar properties are relevant. 4) assessments of other comparable properties also relevant. 5) in light of all evidence, opinion can be formed to value. 6) if there are no Rents available, a review of comparable assessmentsay be helpful.

Question 42

What is the difference between advocate and exert witness(independent expert?

Answer 42

Expert witness has a duty to the panel. And will explain facts and evidence that led to an opinion. Advocate has a duty to the client and will labour's on points to win the case.