The question of who is in occupation of rateable premises is the key to determining the nature of the hereditament.
The Upper Tribunal (Lands Chamber) has considered this issue dismissing an appeal in Prosser KC v Ricketts (VO) [2024] UKUT 264 (LC); [2024] PLSCS 159.
The appellant was head of Pump Court Tax Chambers of 15-17 Bedford Row, London, WC1. At the material time of 1 April 2017, chambers had an annex of two floors in Jockey Fields, entered in the non-domestic rating list as a single hereditament with a rateable value of £152,000.
The appellant proposed altering the list to show each of the rooms occupied by individual barristers as a separate hereditament to facilitate small business rate relief. The valuation officer rejected the proposal. The Valuation Tribunal for England agreed the premises should remain as one hereditament. The appellant appealed.
It was agreed that each of the barrister’s rooms was capable of forming a separate hereditament and that the rateable values proposed were appropriate. The sole issue was whether the rooms were in the sole or paramount occupation of the individual barristers or of chambers under either management or lease arrangements.
Leases of the premises (ground-floor reception and seven barrister’s rooms and three rooms in the basement for pupils, seminars and ancillary administration) were held by four members of chambers in trust for all members. The leases included a declaration that the tenant held the property on a trust of land and prohibited assigning or parting with possession/occupation of part. However, other beneficiaries of the trust were permitted to use the premises provided no relationship of landlord and tenant was created.
All members of chambers were self-employed sole practitioners. The Chambers constitution provided that each member of chambers had an equal and joint beneficial interest in every part of the premises. Members shared expenses but not receipts, thereby avoiding being in partnership. Each member was required to bear their due proportion of rent, rates and other chambers’ expenses. Room contribution was determined by floor area and residual expenses were a percentage of the member’s receipts from work done.
The premises were occupied for a shared purpose of all members, to enable them to carry on their individual practices from the same premises, under their collective identity and to benefit from the joint provision of support and administrative services and sharing of expenses. The common purpose required some parts of the premises to be allocated to individual members and others to administration, seminars and training but the agreed arrangement was a joint occupancy of the whole.
Louise Clark is a property law consultant and mediator
