Rating Manual Volume 4

Section 5 - Practice Note 1 2010 - Rental Adjustment

1. Introduction

2 Objectives

3 Order of adjustment

4 Value Added Tax (VAT)

4.2 VAT on rents

4.3 The Operation of VAT

4.4 Application of VAT to property transactions

4.5 The election to waive exemption (option to tax)

4.6 The effect of VAT on tenants

4.7 The likely effects of VAT on rents

4.8 VAT rates and dates

5 Landlord’s Incentives

5.1 Background

6 Adjustment for financial inducements

7 Rent free period

7.1 The alternative analyses available are best illustrated by an example.

8 Reverse premiums

9 Contributions to fitting out

10 Assuming liabilities

11 Treatment of Premiums

12 Premiums and Key Money

12.4 a) Goodwill

12.5 b) Fixtures and Fittings

12.6 c) Stock

12.7 d) Residual Value of previous tenants improvements

12.8 e) Capitalised Profit Rent/Key money

13 Stepped Rents

14 Improvements

15 Cost of improvements and the virtual rent

16 The amortisation percentage to be used

17 Period of amortisation

18 Amortisation Percentage

19 Surrender of Former Lease

Example

20 Overage

21 Domestic accommodation

22 Non-Domestic Rates

22.2 Adjustment of Inclusive Rents

Table 1

Table 2

23 Insurance

24 Services

25 Fixtures, Fittings, Plant and Machinery

26 Repairs

27 Turnover Rents

28 Turnover Leases – General

29 Reliability of Rent

30 Charitable Relief

31 Reliability Indicator

32. Relevant Date of Rent

Section 5 - Practice Note 1 2017- Rental Adjustment

1. Introduction

2 Objectives

3 Order of adjustment

4 Value Added Tax (VAT)

5 Landlord’s Incentives

6 Adjustment for financial inducements

7 Rent free period

8 Reverse premiums

9 Contributions to fitting out

10 Assuming liabilities

11 Treatment of Premiums

12 Premiums and Key Money

13 Stepped Rents

14 Improvements

15 Cost of improvements and the virtual rent

16 The amortisation percentage to be used

17 Period of amortisation

18 Amortisation Percentage

19 Surrender of Former Lease

20 Overage

21 Domestic accommodation

22 Non-Domestic Rates

23 Insurance

24 Services

25 Fixtures, Fittings, Plant and Machinery

26 Repairs

27 Turnover Rents

28 Turnover Leases – General

29 Reliability of Rent

30 Charitable Relief

31 Reliability Indicator

32. Relevant Date of Rent

Section 5 - Practice Note 1 – Pre 2010 - Rental Adjustment

Part 1 : Introduction

Part 2 : Objectives

Part 3 : Value Added Tax (VAT)

Part 4 : Repairs

Part 5 : Insurance

Part 6 : Non-Domestic Rates

Part 7 : Services

Part 8 : Fixtures, Fittings, Plant and Machinery

Part 9 : Premiums and Key Money

Part 10 : Landlord’s Incentives

Part 11 : Improvements

Part 12 : Amortisation Percentage

Part 13 : Surrender of Former Lease

Part 14 : Stepped Rents

Part 15 : Overage

Part 16 : Turnover Rents

Part 18 Reliability of Rent

Part 19 : Relevant Date of Rent

PRACTICE NOTE 2 : 1995 : 1995 Revaluation Valuation of Space where a Supply/Demand Imbalance exists at AVD

1. The problem

2. The Legislative Framework

3. Basic Principles Investigated

4. Reliability of Rents

5. The state of the locality at 1/4/93 and 1/4/95

6. A practical approach

7. A possible outcome in a typical locality

8. Conclusion

Section 5 - Practice Note 2 - 2010 - Effect of Rates Relief on the Rental Market

1.0 Introduction

2.0 Reliefs

3.0 Rent/Rates Equation

4.0 Categories to Consider

5.0 Conclusions