Update on rent reviews and the decision in Mason v Boscawen

Bookmark and Share
24 April 2009
It looks as though normal order will be restored on rent reviews by virtue of a statutory amendment to reverse the effect of the Mason v Boscawen case which we briefed you on previously. This is an extremely welcome development removing huge amounts of uncertainty from 1986 Act rent reviews involving VAT.
The decision in Mason v Boscawen meant that in cases where the landlord had opted to tax VAT on rent, the effect of decreasing VAT to 15% was that the rent had decreased on 1 December 2008. As a result, the earliest date on which either party could obtain a rent review would be 1 December 2011. The ruling had the potential to cause hardship to landlords or tenants or both over a period of time.
The relevant passage from the Budget Report states:
A.104  Following Royal Assent to Finance Bill 2009, changes in the VAT rate or other changes to the VAT status of agricultural land will not be considered rent changes for the purposes of rent review provisions in the Agricultural Holdings Act 1986.

To see the full Financial Statement and Budget report click here.

Search news archive