The Upper Tribunal handed down judgment yesterday in a test case about whether the rateable value of Grade ‘A’ office premises is increased by tenant’s fit out works. Some headline points from the judgment:
- The Tribunal firmly rejected the proposition that a building in Category B condition is worth no more than a building in Category A condition, confirming that the rateable value of the building is increased by tenant’s fit out works;
- In ascertaining the rateable value of the building, it is permissible to amortise the costs of the fit out works; there is no statutory requirement to apply the statutory decapitalisation rate. The UT declined to follow Dorothy Perkins in this respect;
- The statutory decapitalisation is only required to be applied to the valuation of part of a hereditament where that part is being valued on the full contractor’s basis of valuation; the application of the statutory rate will not be mandatory unless the part being valued is capable of being a separate hereditament with a separate rateable value;
- On an appeal of wide importance, it is incumbent on the parties to bring forward good quality market and factual evidence, if necessary by asking for the Tribunal’s assistance in the form of orders for disclosure or witness summonses.
The VO’s appeal was allowed. The Judgment may be accessed
here.
Jenny Wigley KC of Landmark and Sarah Sackman of Matrix Chambers represented the VO.
