The Court was asked how different storeys under common occupation in the same block are to be entered in the rating list for the purpose of non-domestic rating. In this case the firm’s two offices were in the same building, but the connection between them was only by way of a communal lift.
Held: The valuation officer’s appeal succeeded. The two offices were separate heraditaments.
Lord Neuberger said: ‘I derive from these decisions three broad principles relevant to cases like this one where the question is whether distinct spaces under common occupation form a single hereditament. First, the primary test is, as I have said, geographical. It is based on visual or cartographic unity. Contiguous spaces will normally possess this characteristic, but unity is not simply a question of contiguity, as the second Bank of Scotland case illustrates. If adjoining houses in a terrace or vertically contiguous units in an office block do not intercommunicate and can be accessed only via other property (such as a public street or the common parts of the building) of which the common occupier is not in exclusive possession, this will be a strong indication that they are separate hereditaments. If direct communication were to be established, by piercing a door or a staircase, the occupier would usually be said to create a new and larger hereditament in place of the two which previously existed. Secondly, where in accordance with this principle two spaces are geographically distinct, a functional test may nevertheless enable them to be treated as a single hereditament, but only where the use of the one is necessary to the effectual enjoyment of the other. This last point may commonly be tested by asking whether the two sections could reasonably be let separately. Third, the question whether the use of one section is necessary to the effectual enjoyment of the other depends not on the business needs of the ratepayer but on the objectively ascertainable character of the subjects. The application of these principles cannot be a mere mechanical exercise. They will commonly call for a factual judgment on the part of the valuer and the exercise of a large measure of professional common sense. But in my opinion they correctly summarise the relevant law. They are also rationally founded on the nature of a tax on individual properties. If the functional test were to be applied in any other than the limited category of cases envisaged in the second and third principles, a subject (or in English terms a hereditament) would fall to be identified not by reference to the physical characteristics of the property, but by reference to the business needs of a particular occupier and the use which, for his own purposes, he chose to make of it.’
Lord Neuberger, President, Lord Sumption, Lord Carnwath, Lord Toulson, Lord Gill
[2015] UKSC 53, [2015] 1 AC 1862, [2016] 1 All ER 299, [2015] WLR(D) 353, [2015] 3 WLR 386, UKSC 2013/0117
Bailii, WLRD, Bailii Summary, SC, SC Summary
England and Wales
Citing:
At UTLC – Tower Bridge House, Re UTLC 11-Jun-2012
UTLC RATING – hereditament – whether two floors in modern office block to be entered as single hereditament though separated by other floors – held they were – valuation – end allowance – whether allowance to be . .
Appeal from – Woolway (Valuation Officer) v Mazars Llp CA 17-Apr-2013
The valuation officer appealed against a decision to list an office block at issue as a single heraditament. . .
Cited – Bank of Scotland v Assessor for Edinburgh 1890
(Lands Valuation Appeal Court) The court considered the rating applicable where several banks retained nearby properties for the occupation of its staff. There were three categories of residential premises: (i) dwellings which were in buildings . .
Cited – Bank of Scotland v Assessor for Edinburgh 1891
(Lands Valuation Appeal Court) The Court considered the appropriate entry for property contiguous with a bank, but with no interconnection, the house being held for the occupation of bank employees.
Held: Lord Wellwood repeated his view that . .
Cited – Midlothian Assessor v Buccleuch Estates Ltd 1962
(Lands Valuation Appeal Court) The landowner had several parcels of woodland and sawmills. They were on different sites, but worked together as a single business.
Lord Kilbrandon observed: ‘It has never yet been admitted that you can have a . .
Cited – Farmer and Another v Buxted Poultry Ltd HL 10-Mar-1993
Buildings which were in fact far apart, could not be treated as being ‘occupied together with’ as agricultural buildings for rating purposes. . .
Cited – Burn Stewart Distillers plc v Lanarkshire Valuation Joint Board 2001
(Lands Tribunal for Scotland) Premises under common occupation but situated on opposite sides of a main road constituted two hereditaments: ‘We consider that the emphasis on the geographical test is an aspect of recognition that lands and heritages . .
Not approved – Burn Stewart Distillers plc v Lanarkshire Valuation Joint Board 2001
(Lands Tribunal for Scotland) Premises under common occupation but situated on opposite sides of a main road constituted two hereditaments: ‘We consider that the emphasis on the geographical test is an aspect of recognition that lands and heritages . .
Cited – British Railways Board v Hopkins (Valuation Officer) LT 1981
Different storeys under common occupation as constituting a single hereditament, whether they were contiguous or not. . .
Lists of cited by and citing cases may be incomplete.
Rating, Land
Updated: 03 January 2022; Ref: scu.550797
