Rory Kennedy, Rural Estates Partner, reviews the potential for Unoccupied Property Relief in relation to Shooting Rates.
The Land Reform (Scotland) Act 2016 heralded the reintroduction of shooting land and deer forests to the rates roll. Tax law is typically complex and the detail contained within the statue usually provides the basis on which advisers and tax authorities set out their understanding. In the case of Shooting Rates, the legislative framework was all but a footnote within the wider land reform legislation, with the unenviable task of sorting the ‘devil in the detail’ being passed to the district assessors and individual local authorities. This was not helped by the Scottish Government setting an initial timeline which was clearly undeliverable.
This has created an unhelpful situation where a tax regime has been rushed through, necessarily retrospective in nature, with unintended consequences that have blindsided the rural sector and caused a large degree of Government embarrassment. Of the largest Shooting Rates assessments, a disproportionate amount were commercial forestry estates, particularly those owned by the Government’s own Forest Enterprise. Designed as a shooting tax it is a curious, unintended consequence that many of the largest assessments were for estates where commercial shooting was non-existent or of incidental interest. As the Shooting Rates regime evolves, one obvious way to correct this anomaly has been for the Scottish Government to provide guidance that local authorities should allow Unoccupied Property Relief to apply where an assessable landholding does not have a commercial occupier. This is a key development and the commercial
nature of the shooting occupier is key; family shoots or deer control purely for good management may receive this favourable treatment, even where shooting activity does take place.
How exactly this will work on a council-by-council level will take some time to become clear, however shooting permissions without a commercial occupier may receive 100% ongoing relief. This does become more problematic where deer forests also have some rateable buildings, such as larders, however there may be scope to subdivide the land holding and this would be an area to seek specific advice. Importantly, this relief does require an election and is not automatically provided. It is also worth considering that Shooting Rates interplay with other non-domestic rates and the existing Small Business Bonus Scheme, with rateable values below £15,000 potentially outside of the scope altogether. As such, the vast majority of land holdings will be outside the regime and, in such cases, there remains little rates advantage in a landowner not allowing sporting activity on their land.
If you have a query about Shooting Rates, please contact Rory at firstname.lastname@example.org or call 0131 558 5800.