The recent Supreme Court judgment in Hurstwood Properties v Rossendale Borough Council has clarified that the burden of paying empty rates should fall on the person who has the practical ability to bring unoccupied property back into use. This business rates mitigation scheme involved the grant of short leases of unoccupied properties to special-purpose vehicles (SPVs) with the intention that they became the 'owner' of the properties and liable for business rates. The SPVs were then either wound up or struck off from the register of companies and thus avoided paying any business rates. Both the High Court and Court of Appeal found in favour of the landowners that the SPVs were liable. However, Rossendale Borough Council and Wigan Council appealed on the basis that: (1) the leases were pre-arranged tax-avoidance schemes and the relevant statute should be interpreted accordingly; or (2) the corporate veil should be lifted and the SPVs ignored.
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