Publication
Global rules on foreign direct investment (FDI)
Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
Global | Publication | August 2018
It is stating the obvious to say that business rates are an onerous financial liability and may be the cause of some businesses sinking rather than swimming – particularly in the retail sector. It is not surprising, then, that schemes to mitigate business rates have evolved. One such scheme was the focus of R (On the application of Principled Offsite Logistics Ltd) v Trafford Council [2018] EWHC 1687.
If premises are unoccupied, liability to pay business rates falls on the property owner. Under the Non-Domestic Rating (Unoccupied Property) (England) Regulations 2008, unoccupied shops and offices are entitled to a 100 per cent exemption from rates for three months - six months in the case of unoccupied industrial and warehouse premises. If the property is subsequently re-occupied for more than six weeks, the property owner can claim a new exemption if the property falls empty again.
The main business of Principled Offsite Logistics Ltd (POL) was to occupy otherwise empty premises for short periods for the declared purpose of minimising the landlord’s liability to pay business rates by taking advantage of the exemptions regime for empty properties. Under the arrangement, POL took a short term lease of more than six weeks at a peppercorn rent and charged the landlord a fee based on the rates saved by the landlord as a result of a 100 per cent exemption being triggered. During the term the premises were used by POL for small scale storage.
The local rating authority claimed that mere storage on the property with the admitted intention of mitigating rates, rather than for an independent commercial purpose, could not amount to beneficial occupation for rating purposes.
The High Court disagreed. While occupation has to be “beneficial” to amount to rateable occupation, occupation for reward without any further commercial or other purpose was of value in itself and sufficient to amount to beneficial occupation in this context. The scheme therefore worked.
The decision has been described as “ground-breaking” given the number of schemes of this type and, as the judge pointed out, several challenges by local authorities as to the validity of such schemes have been on hold pending the outcome of this case.
Publication
Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
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On February 2, 2024, the Belgian Presidency of the Council of the European Union confirmed that the Committee of Permanent Representatives had signed the Artificial Intelligence (AI) Regulation, referred to as the AI Act. Approval by the EU Parliament followed on 13 March 2024, and the AI Act is likely to appear in the EU’s Official Journal around May 2024. The AI Act aims to establish a stringent legal framework governing the development, marketing, and utilisation of artificial intelligence within the region, thereby marking a significant advancement in the regulation of this burgeoning domain.
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