The Supreme Court has handed down its judgment in Hurstwood Properties (A) Ltd v Rossendale Borough Council [2021] UKSC 16. The case concerned schemes designed to avoid the payment of national non-domestic rates on empty properties. The schemes involved setting up an SPV, to which the owner of the property granted a lease. The SPV was then placed into members voluntary liquidation.
The premise of the schemes is that the SPV becomes the “owner” of the empty property for rating purposes. This depends on whether it is “entitled to possession” of them under the lease.
The Supreme Court held that an “entitlement to possession” in this context meant or included a practical ability to exercise the right. On the assumed facts of the case, the SPV did not have that ability.
The case also involves consideration of the doctrine of ‘piercing the corporate veil.’ The Supreme Court was unanimous in sharing doubts as to whether this represented a coherent principle or rule of law at all.
The case has a number of wide-ranging and potentially far-reaching consequences for property, tax and corporate lawyers alike.
Nicholas Trompeter QC acted for the Respondents. Please contact the clerks if you would like to discuss the case.