Kevin Prosser KC v Andrew Ricketts
[2024] UKUT 264 (LC)
Shynar Zhylzhaxynova v Jo Moore (Valuation Officer)
15 July 2024
[2024] UKUT 204 (LC)
Upper Tribunal
Two businesses used one building. Even though they were separate companies, the main company that rented the place was considered the sole occupant for tax purposes because they had the lease and the other company didn't have exclusive rights to its part of the building.
Key Facts
- •Appeal against Valuation Tribunal for England decision that Unit 1 Slater Court, Peterborough is a single hereditament.
- •Appellant claims two separate hereditaments occupied by two companies: QPL (leaseholder) and QNP Toys.
- •Unit comprises a warehouse and mezzanine office; QPL occupies the office, QNP Toys the warehouse.
- •Both companies are run by the appellant, Ms Zhylzhaxynova, but are legally distinct.
- •The Unit has shared utilities (electricity, water), security system, and access points.
- •QNP Toys' occupation is by license from QPL, not a sublease.
Legal Principles
The primary test for determining a hereditament is geographical, but a functional test may be relevant.
Woolway (VO) v Mazars LLP [2013] UKSC 53
For rateable occupation, there must be actual occupation, exclusive for the possessor's purposes, beneficial, and not transient.
John Laing & Son Ltd v Assessment Committee for Kingswood Assessment Area [1949] 1 KB 344
Where there is more than one occupier, the question of paramount occupation determines who is the ratepayer. The landlord's paramount occupation isn't extinguished simply by granting another party access to a portion of the property.
Hollywell Union and Halkyn Parish v Halkyn District Mines Drainage Co [1895] AC 117
The terms of the contract under which the premises are held are crucial in determining rateable occupation.
Ludgate House Ltd v Ricketts (VO) [2020] EWCA Civ 1637
Outcomes
Appeal dismissed; Unit 1 Slater Court is a single hereditament.
QPL, as the leaseholder, is in paramount occupation of the entire unit despite QNP Toys' occupation of the warehouse. The unit is not geographically or functionally divisible into two separate hereditaments. The shared utilities and lack of exclusive possession by QNP Toys support this conclusion.