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Posted by Joanna Davies on 17/03/2017 at 13:04 | Permalink | Comments (0)
Times remain turbulent in the NHS with barely a day passing without a news item about increased demand, longer waiting times, trusts in deficit or facilities facing closure. On top of all of this rates revaluation is set to open a further hole in NHS finances with estimates of increased cost to the NHS over the next five years being as high as £635m.
The current rating revaluation has hit the headlines with more businesses find cause for complaint at exorbitant increases than those celebrating lower rates. This is despite government claims that the changes are revenue neutral and in fact bring considerable savings to the business community. But what about the NHS? Yes, your local hospital and the GP practice down the road all pay business rates. The bill to the NHS for business rates under the rating revaluation is set to increase by a third over the next five years draining the NHS of up to £635m.
The Department of Health has already ruled out increasing funding to offset this additional cost. Hard pressed NHS trusts, many of which are already in deficit will struggle to absorb this additional cost whatever transitional relief may or may not be made available.
Such is the concern that a large scale challenge is being mounted in an attempt to secure exemption or relief from business rates for NHS bodies, but this has been resisted vigorously by local authorities which have their own funding problems.
All of this is in the context of the appeals process also being tightened up to the disadvantage of appellants – and an appeals backlog still not cleared from the last revaluation in 2010.
It is true that NHS spending is at record levels and it is true that there is still scope for improvement in the system, but with real terms spending almost flat up to 2021 and with healthcare costs still outstripping inflation, that Brexit battle bus commitment to pump more money into the NHS won’t come a moment too soon – or has the promise already been swept under some political carpet?
The author of this post is Graham Dupree - please click here for further details and to contact him.
Posted by Joanna Davies on 09/03/2017 at 15:08 | Permalink | Comments (0)
Yesterday, Lauren Parker and Nichola Ross spoke at the Landed Estates Conference held at the Grange Fitzrovia hotel. This annual event, attended by well over 85 lawyers and other professionals from around the country, reviews taxation and property issues pertinent to owners of landed estates and agricultural land.
Lauren, a principal associate in our Private wealth sector specialising in advising owners of landed estates on tax and partnership matters, talked on the topic ‘Tax structuring for land development’. She gave an overview of the taxes to be considered in various scenarios, and illustrated how planning ahead can ensure that the tax liability on any development land is minimised.
Nichola, a principal associate in our Food and agribusiness sector, spoke about the ‘Key considerations on buying/selling farms”. In a break from traditional topics such as overage, Nichola stressed the importance of proper preparation for any land transaction and challenged the audience to consider the sales pack and due diligence as ‘key considerations’. By highlighting recent deals in the sector, she illustrated how the ability to provide bidders with a full disclosure pack at the pre offer stage, by way of a data room, was changing the concept of ‘Caveat Emptor’ with the seller dealing with questions raised by a buyer only once the ‘deal had been done’.
The recent case of The Crown Estate Commissioners v Wakley and Wakley has reminded practitioners of the importance of the accuracy of ‘replies to enquires’ and the need for a seller to provide “warts and all” information or be specific where no information is given on a point – especially in relation to the state of repair of buildings and equipment.
The above has been posted on behalf of Nichola Ross, who's details may be found here.
Posted by Laura Ludlow on 09/02/2017 at 13:30 | Permalink | Comments (0)
Joint head of M&R’s food and agribusiness sector, Michael Aubrey, presented on the legal implications of Brexit this morning (February 8) at the 2017 Sentry Farming Conference in Newmarket. The talk addressed considerations including the importance of distinguishing between EU Directives and Regulations, the differing rules of statutory interpretation and the continuing authority of European treaties even after Brexit.
Michael left the audience with five key recommendations to help farming businesses cope with the inevitable upheaval:
Above all, the agricultural sector should remain confident that it will survive this period of uncertainty and no-one should rush into measures that don’t make sense for their business.
Posted on behalf of Jessica Burt, who can be contacted here.
Posted by Laura Ludlow on 08/02/2017 at 16:59 | Permalink | Comments (0)
2016 was a period of great upheaval for the UK as a whole and the UK Higher Education sector in particular. Regulatory change, the results of the EU Referendum and the US Election have all combined to create a period of significant uncertainty, making strategic decision-making challenging to say the least.
The one thing that can be said for certain for the year ahead is that the period of uncertainty will continue but dominant themes can still be identified and planned for:
2017 promises to be a year of continuing uncertainty and challenges. This is nothing new however and the sector has proved its resilience and its ability to adapt and thrive in the past and the business of delivering world class education must continue.
Posted by Tim Allsop on 17/01/2017 at 14:34 | Permalink | Comments (0)
On 23 November 2016, Philip Hammond delivered the Autumn Statement, and this was to be the last “Autumn Statement” following his announcement for a new budget timetable from Autumn 2017. The Statement included some measures which impact on the property sector:
With the uncertainty of the implications of invoking Article 50, it is encouraging to see the government’s attempts to stimulate the property market.
Posted by Jessica Hogg on 25/11/2016 at 10:01 | Permalink | Comments (0)
Following the unveiling of the Budget yesterday there will be changes to Stamp Duty Land Tax (SDLT) for both commercial and residential transactions.
Changes are to be made on SDLT charged on purchases of non-residential properties and transactions involving a mixture of residential and non-residential properties. The increased rates are 0% rate on purchases of up to £150,000, 2% on the next £100,000 and 5% top rate above £250,000. The major change is that from the 17 March 2016 SDLT will be charged at each rate on the portion of the purchase price which falls within each band (“the slicing system”). Whilst the highest rate for SDLT has increased from 4% to 5% it also begins at a lower figure of £250,000 rather than £500,000. However the change to the slicing system may offset the increase in rates for properties up to approximately £1 million, whilst for the more expensive properties the changes are likely to lead to a tax increase.
The position for leasehold transactions is already dealt with by the slicing system but from 17 March 2016 a new 2% rate for rent paid under a non-residential lease will be introduced where the net present value of rent is above £5 million (previously 1%).
In residential transactions from 1 April 2016 a new 3% SDLT surcharge will come into force for the purchase of additional residential properties such as second homes and buy-to-let properties. The higher rates will be 3% above the current SDLT rates. This is part of the Government’s plan to support home-ownership and first-time buyers.
These measures do not apply to Scotland as SDLT was devolved to Scotland on 1 April 2015. This will apply in Wales until 1 April 2018 when SDLT will be devolved to Wales.
It is likely that yesterday’s announcement will represent a tax increase for high value commercial properties; whilst the change in residential SDLT will be pushing many investors of any impending purchases to complete before 1 April 2016.
Posted by Jessica Hogg on 17/03/2016 at 14:37 | Permalink | Comments (0)
Land transactions in Scotland and Wales will soon no longer be within the scope of Stamp Duty Land Tax (SDLT) as the tax is devolved from Westminster.
From 1 April 2015 under the Land and Buildings Transaction Tax (Scotland) Act 2013, Scotland will have a new land transaction tax. This means that Scotland will no longer be within the scope of SDLT.
Wales to is soon to follow suit following the Wales Act 2014 which confers the new tax powers on the Welsh Assembly. Finance & Government Minister Jane Hutt launched the consultation on a Land Transaction Tax (LTT) as a replacement for UK SDLT from April 2018. The consultation was launched on the 10 February 2015 and will end on the 6th May 2015 (the day before the next General Election). Hutt is encouraging involvement in the consultation for the proposal and design of the first welsh tax in over 800 years.
Though not many lawyers in England and Wales are instructed on land transactions in Scotland, a large number do conduct land transactions in Wales. Recent HMRC estimates for 2013-2014 show Welsh revenues at £145 million for SDLT, with 51,600 transactions taking place. The Office for Budget Responsibility forecasts that in 2018-2019, when it is proposed the tax is devolved, the SDLT revenues could be £231 million in Wales.
This means that lawyers dealing with land transactions in England and Wales will have to comply with two sets of land tax rules depending on whether the property is based in England and Wales. Depending on the approach that the new welsh tax takes this could also lead to confusion amongst property owners purchasing land in England and Wales.
The devolution of the land transaction tax to Wales is likely to impact on a considerable proportion of the Welsh population and depending on the route taken may result in Westminster making further amendment to UK SDLT.
Posted by Jessica Hogg on 30/03/2015 at 14:26 | Permalink | Comments (0)
The Autumn Statement included a radical change to the way SDLT is charged on residential properties:
£0 to £125,000 = 0%;
Over £125,000 to £250,000 = 2%;
Over £250,000 to £925,000 = 5%;
Over £925,000 to £1.5m = 10%; and
Over £1.5m = 12%.
For those purchasing properties for £937,500 or less, the changes should be beneficial and result in less SDLT.
The more progressive system should also eliminate the “cliff edge” effect which was produced by the old SDLT system (there is now, for example, no SDLT reason why a property cannot be acquired for £251,000).
But the SDLT on purchasing high value dwellings could now be extremely high. It should also be borne in mind that the punitive 15% rate of SDLT for high value dwellings acquired by companies continues to apply.
One of the most interesting things about the change is how swiftly it has been introduced, coming into effect only hours after the delivery of the Autumn Statement and with no significant consultation.
Although there are some “grandfathering” provisions (allowing some contracts already exchanged to benefit from the old rules), many will be stuck with the new regime. They may be particularly interested in the possibilities of acquiring multiple properties simultaneously, which could drive down the SDLT chargeable by virtue of:
This article was written by Matthew Short
Posted by Jennifer Lewis on 05/12/2014 at 14:14 | Permalink | Comments (0)
A recent decision of the Lands Tribunal has ruled on the liability of a tenant to pay business rates while undertaking substantial works to its premises.
As a general rule, business rates are payable on vacant premises. However, an exception to this rule is that business rates are not payable if the premises are incapable of beneficial occupation.
This case was an appeal brought by R3 Products Limited (R3) against the decision of Valuation Tribunal for England in respect of the rateable value of its premises in Sheffield. R3 had entered into a 10 year lease at a rent of £100,000 per annum. Before completing the lease, R3 discovered that the premises required substantial works to provide it with the large quantities of electricity it required for its manufacturing processes. These works were to be carried out over three phases. R3 managed to negotiate a 3 month rent free period with its landlord in which to carry out the works.
R3 submitted that, during phase 1 of the works, they were unable to use the premises to manufacture its products. Therefore the premises were incapable of beneficial occupation and should be removed from the rating list for this period.
The Lands Tribunal found against R3. The test of whether a property is capable of beneficial occupation is whether the premises are ready for occupation as a building, it was not whether the premises are fit to be used by a specialist occupier or for some special purpose - carrying out these works did not in itself prevent beneficial occupation as per the test.
This decision serves as useful guidance and a reminder that tenants must carefully consider their potential liability to pay business rates when negotiating and entering into leases, even where there are to be substantial works or fit out periods.
Article written by Peter Collins
Posted by Katie Philpot on 09/10/2014 at 12:55 | Permalink | Comments (0)