From April 2017 sporting rights will be taxed. The full details are yet to be finalised but sporting estates will shortly receive a sporting questionnaire which will help determine your rates. Questionnaires will need to be completed regardless of whether you lease out your sport or not.
The aim of the questionnaire is to establish the size of your holding, productivity, game returns and what, if any, rent is received.
It is only conjecture at this point but we believe that rates will be based on a ‘hypothetical’ valuation of the annual rent achievable for the sport; be it shooting or stalking.
Historically, rates were based on attributing a net annual value to the species involved i.e. per red stag or brace of grouse and then charged a rate in the pound on that value. Otherwise known as a poundage rate; effectively a multiplier. This multiplier is set by the Scottish Ministers but is yet to be set. We believe a similar approach will be adopted again.
Regardless of whether you exercise your rights to shoot on your land or not, if it is deemed to have the capacity to earn an income then it has an inherent value and will be registered on the valuation roll.
Whilst, large sporting estates are expected to take the brunt of this re-introduction they will by no means be the only ones. The concern for many will be the Small Business Relief thresholds.
It is worth noting that if you manage your deer proficiently the Assessors do have the ability to award you a discretionary discount. This is certainly worth exploring as a way to reduce costs. If you would like some advice on deer management please feel free to discuss this with us.
Similarly if you would like any advise on what action to take and how best to utilise reliefs and/or negotiate reductions, please give us a call.
The reintroduction of sporting rates is certainly controversial, the theory is that the income generated by this tax will go towards community land funds. However, the uncertainty surrounding the specifics is a serious concern and there are a number of questions that remain unanswered. Including the question of what quarry species will be taxable.
If you would like any help with completing questionnaires, querying or appealing decisions or simply wish to explore what options are available to reduce your tax bill please do not hesitate to contact us on 0131 476 6500.