Forestry Commission hereditaments and exemption

This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version.

1. Introduction – purpose of this section

The Forestry Commission owns, occupies and manages large areas of forests, woodland and other land in England and Wales. Whilst the production of UK-grown timber is still at the core of the business, the Commission’s interests have broadened to include a wide range of leisure activities.

This diversification creates complexities for the VOA when considering the boundaries between rateability and the exemptions available to agricultural premises and parks. So, before bringing Forestry Commission property into assessment, there are two principal issues to resolve:

i. Agricultural Exemption

a.Are the Commission’s forests and woodlands ‘agricultural land’ as defined in paragraphs 1 and 2 of Schedule 5 to the Local Government Finance Act 1988 [LGFA 1988]?

b.Are the Commission’s buildings immediately ancillary to the agricultural purposes of the Commission’s forests and woodlands ‘agricultural buildings’ as defined by paragraph 3 of Schedule 5.

ii. Parks exemption:

a.Are the Commission’s forests exempt as ‘parks’, under paragraph 15 of Schedule 5?

b.Do facilities provided by the Forestry Commission also enjoy exemption under paragraph 15 because they are ‘essential amenities’ to a ‘park’?

Following discussions with the Forestry Commission and their advisers and the help of detailed advice from leading counsel instructed by the HMRC Solicitor’s Office, this Section provides guidance on these various points.

2. Application of Agricultural Exemption

The relevant legislation in Schedule 5 LGFA 1988 is:

“1. A hereditament is exempt to the extent that it consists of any of the following:

(a) agricultural land

… … …

2(1) Agricultural land is -

… … …

(b) land used for a plantation or wood or for the growth of saleable underwood

… … …

(d) anything which consists of a… … nursery ground

… … …

(2) But agricultural land does not include -

… … …

(d) land used mainly or exclusively for sport or recreation … .”

The Commission’s forests or woods will be exempt under paragraph 2(1)(b) and/or (d) to the extent that they are used for timber production.

Plainly, the production of timber and the management of forest and woodland for that purpose fall squarely within the use of land described in that paragraph. The same is also true of the Forestry Commission’s ‘non-commercial’ activities, such as environmental conservation and the management of the nation’s natural woodland resource for its own sake, because the statutory definition in sub-paragraph 2(1)(b) does not depend upon the existence of a commercial purpose in relation to the use of the land.

A question may arise whether the use of any particular area of forest or woodland for sporting or recreational activities was such as to bring into operation the statutory exclusion under paragraph 2(2)(d) - examples might include a 4x4 off-road course, a rally stage or testing, orienteering or mountain bike courses, etc&hellip

The exclusion, however, does not operate unless the land in question is used “mainly or exclusively” for purposes of sport or recreation. Although this will be a question of fact and degree in every case, it is doubtful whether such sporting and recreational activities would be the predominant use of the land having regard to the Forestry Commission’s overall pattern of operations and husbandry of the woodland.

2.1. “To the extent that”

The legislation provides that hereditaments are exempt “to the extent that”, and this form of words is common to all exemption classes within Schedule 5 LGFA 1988. The importance of this phrase, in providing a more focussed test, cannot be over emphasised.

In relation to the “park” and “agricultural land” exemptions, the words, ‘to the extent that it consists of’ must be viewed as a physical or spatial test, not one related to temporal (time related) occupation - ie exemption will not be granted according to the time an ‘exempt’ use occupies the property. (This contrasts with the words used elsewhere in Schedule 5, eg paragraph 11(2), where exemption is contingent on the hereditament being ‘occupied by’ a body responsible for the organisation of the conduct of public religious worship - this is a temporal test).

The meaning of the words ‘consists of’ were explained in Gallagher (VO) v Church of Jesus Christ of Latter Day Saints (LT [2006] RA 1) see Rating Manual: Valuation Practice: Exemptions Part B, Churches, Church and Chapel halls, paragraph 3: ‘To the extent that’ in Schedule 5 exemptions.

Thus, to the physical extent that land is physically a forest or wood used for timber production, it is exempt as agricultural land.

2.2. Forest buildings as agricultural buildings

The relevant legislation in Schedule 5 LGFA 1988 is:

“3. A building is an agricultural building, if it is not a dwelling and –

(a) it is occupied together with agricultural land and is used solely in connection with agricultural operations on that or other agricultural land.” (emphasis added)

Thus, the key statutory requirements are that the subject building is:

• “occupied together with agricultural land” and

• “used solely in connection with agricultural operations on that land or other agricultural land”.

The nature of “agricultural operations” has been the subject of extensive case law and the issue of ‘sole use’ in relation to para 3(a) is covered in Rating Manual: Valuation Practice: Exemptions: Part D: Agricultural Exemptions paragraph 5.1.5 -

Additionally, paragraph 8(3) qualifies the meaning of “sole use” in this context:

“In determining for the purposes of paragraphs 3 to 7 above whether a building used in any way is solely so used, no account shall be taken of any time during which it is used in any other way, if that time does not amount to a substantial part of the time during which the building is used.”

The Forestry Commission occupies a wide range of buildings which have a functional connection to the overall pattern of operations and husbandry of the woodland. These include workshops; machinery and timber stores; tree nurseries; mess rooms; deer larders; ‘operational’ offices, etc.. Of these buildings, perhaps operational offices used for administrative purposes may seem intuitively to be the least likely to qualify for agricultural exemption. A number of such buildings are occupied by the Forestry Commission as regional administrative centres, known as ‘Regional and District Offices’.

Nevertheless, Forestry Commission buildings (which are not dwellings), including ‘Regional and District Offices’, may be exempt provided the three conditions in paragraph 3(a) Sch 5 are all satisfied, namely:

a.they are “occupied together with” agricultural land;

b.they are “used in connection with” agricultural operations on that or other agricultural land”; and

c.that use is their “sole use“.

The “occupied together with” condition will only be met where the plantation or afforestation and the buildings constitute a single unit of forestry. This follows from the leading case of Farmer (VO) and Hambleton DC v Buxted Poultry Ltd ([1993] RA 1 (HL)), where the main issue was whether a provender mill producing animal feed was “occupied together with” the poultry houses to which it supplied the feed. In the decision, Lord Slynn of Hadley stated:

” I agree with Glidewell LJ that for one building to be “occupied together with” another [in the case of forests substitute agricultural land for “another”] for the purposes of this Act they must be in the same occupation and the activities carried on both must be jointly controlled or managed. I also consider that the buildings must be so occupied and the activities so controlled and managed at the same time. These are necessary conditions to be satisfied but to satisfy each of them separately or together is not sufficient to establish that one building is “occupied together with” another for rating purposes. Nor is there any geographical test which gives a conclusive answer - though the distance between the buildings [or, in the context of the Forestry Commission, the afforestation] is a relevant consideration, as the Court of Appeal held.

It is not, however, sufficient to ask generally whether the buildings or buildings and land in question are all part of the same business enterprise. What it is necessary to show is that the two buildings, or as the case may be, the buildings and agricultural land, are occupied together so as to form in a real sense a single agricultural unit. Contiguity or propinquity may go far to show that they are. Thus farm buildings surrounded by land which, farmed with other land nearby though not contiguous or even land in another neighbouring village, may well as a matter of fact be found to be “occupied together with” each other. On the other hand separation may indicate that they are not and the greater the distance the less likely they are to be one agricultural unit.” (The bold emphasis and comments in brackets have been added to assist understanding)

Regional and District Offices usually cover more than one forest area and occasionally are not located within the forest but in a nearby town. Therefore VOs should consider carefully whether such offices occupied by the Commission meet the “occupied together with” requirement, having particular regard to the geographical or distance tests.

Forestry Commission offices used for the issue of licenses, grants, promoting commercial forestry (other than their own) and their leisure/recreational interests are not exempt as agricultural buildings because they fail the “used in connection with” agricultural operations test.

Buildings that do qualify for exemption are those solely used in connection with the planning, planting and harvesting of timber from the Forestry Commission’s own woodlands. However, when a building, or parts thereof, is used both for qualifying and non-qualifying activities, the time it (or the part) is used for the non-qualifying use should be ascertained. If this amounts to more than 6% of the total time the building is used, the building will fail the “solely used” test (see Glidewell LJ in Farmer (VO) and Hambleton DC v Buxted Poultry Ltd [1991] RA 267, 280 (CA)) and so will not be exempt as an agricultural building.

Some forests contain, or have associated with them, buildings used for the storage of culled deer carcases pending disposal. Such buildings are known as ‘deer larders’. The control of deer in woodlands undertaken to prevent damage to the trees is a necessary crop management measure. Protecting growing trees from damage, whether that damage results from the incidence of disease or the habits of wild life living in the forest, is an essential aspect of sound forestry management and husbandry. Accordingly, such activities can be characterised as part and parcel of ‘agricultural operations’ in the context of forestry. It follows that such ‘deer larders’ are exempt under paragraph 3(a) Sch 5.

2.3.Forests or woods which are exempt as agricultural land cannot also be exempt as ‘parks’

In its occupation of forests or woods which constitute agricultural land, the Forestry Commission derives a benefit from that occupation through the production and sale of timber, etc. In contrast, the ‘park’ exemption is rooted in the notion of that ‘free and unrestricted’ access of the public precludes the occupier from drawing any benefit from its occupation. Hence there is a conflicted, rather than complementary, relationship between the two exemptions. See also paragraphs 3.7 and 3.10, below.

3. Application of ‘Park’ Exemption

NB. This section should be read as part of the principle instructions on Parks Exemption contained in Rating Manual: Valuation Practice: Exemptions: Part C - Parks.

3.1. The Law

The relevant legislation is set out in paragraph 15 of Schedule 5 to the Local Government Finance Act 1988:

Parks

1. (1) A hereditament is exempt to the extent that it consists of a park which -

(a) has been provided by, or is under the management of, a relevant authority or two or more relevant authorities acting in combination, and

(b) is available for free and unrestricted use by members of the public.

(2) The reference to a park includes a reference to a recreation or pleasure ground, a public walk, an open space within the meaning of the Open Spaces Act 1906, and a playing field provided under the Physical Training and Recreation Act 1937.

(3) Each of the following is a relevant authority -

(aa) a Minister of the Crown or Government department or any officer or body exercising functions on behalf of the Crown.

(a) a county council

(aa) a county borough council

(b) a district council

(c) a London borough council

(d) the Common Council

(e) the Council of the Isles of Scilly

(f) parish or community council, and

(g) the chairman of a parish meeting.

(4) In construing sub-paragraph (1)(b) above any temporary closure (at night or otherwise) shall be ignored.

Hence requirements for exemptions are:

1.The ‘park’ must be a hereditament.

2.Exemption applies only to the extent that the hereditament consists of a park.

3.The term, ‘park’, includes a recreation or pleasure ground, a public walk, an open space within the meaning of the Open Spaces Act 1906, and a playing field provided under the Physical Training and Recreation Act 1937. [Thus the statutory meaning in this context is wider than may at first be supposed - see paragraphs 3.4 and especially 3.5 below.]

4.Exemption only applies to a park which is ‘available for free and unrestricted use by members of the public’. [The phrase, ‘free and unrestricted use by members of the public’ significantly modifies the Victorian legal concept that it is the absence of actual or beneficial occupation that gives rise to the exemption as ‘a park’ - see paragraph 3.6 below.] Also, a park may still be available for free and unrestricted use by members of the public even though it is temporarily closed ‘at night or otherwise’.

5.Exemption only applies to a park which has been provided by, or is under the management of, a relevant authority or two or more relevant authorities acting in combination.

6.A relevant authority is an authority which falls within those listed in paragraph 15(3).

The remainder of this Paragraph will look at each of these requirements in some detail.

3.2.The Forestry Commission - A relevant authority?

To take the simplest test first, the Commission is a relevant authority within the provisions of Paragraph 15 (3)(aa) as “a Minister of the Crown or Government department or any officer or body exercising functions on behalf of the Crown”.

3.3 Is the ‘park’ a hereditament?

When looking at Forestry Commission occupations, the usual definitions set out in sections 64(1) of the LGFA and 115(1) of the General Rate Act 1967 apply.

Thus a park hereditament is one that, were it not for the exemption provisions, would be a property which is or may become liable to a rate and which is, or would fall to be, shown as a separate item in the rating list by applying the normal rules established in such cases as John Laing & Son Ltd v Kingswood Assessment Committee [1949 - 1 KB 344] and Gilbert (VO) v S Hickinbottom & Sons Ltd [1956 - 2 QB 40].

As the park exemption only applies to a hereditament, if something is not a hereditament [or part of a hereditament] then it cannot fall within the statutory provision.

Generally, forests occupied by the Forestry Commission forests are definable by name or location, for example Delamere Forest, Forest of Dean, etc. As they are capable of being ‘ringed round’ on a map, they can be identified as a single unit of assessment. If this identified unit of assessment is dissected by roads, it may be regarded as an exception to the general rules in relation to defining the hereditament, qv Lord Denning’s speech in Gilbert (VO) v Hickinbottom. In contrast, if separate occupations exist, the definition of individual hereditaments will be a question of fact.

3.4 What is a park? - The ‘Brockwell Park’ case:

For many years public parks were not assessed following the decision by the House of Lords in Lambeth Overseers v London County Council [1897 - AC 625] - the ‘Brockwell Park’ case.

Brockwell Park was acquired by the London County Council and thereafter held and maintained by them as a park for the public’s use in perpetuity for exercise and recreation. The House of Lords held that the Council were not in rateable occupation of the park because of an absence of both actual and beneficial occupation owing to the land being dedicated in perpetuity to use by the public.

Extracts of the relevant Judgements in the Brockwell park case, together with those in Kingston-upon-Hull Corporation v Clayton(VO) [1961] 3 All ER 118, are set out in Rating Manual: Valuation Practice: Exemptions: Part C - Parks.

Thus historic case law considered that the public’s use of the park precluded the occupier from benefitting from its occupation or alternatively, there was in fact no actual occupation at all.

However, the definition of a ‘park’ in paragraph 15(2) of Schedule 5 LGFA 1988 now extends the ordinary meaning of the word to include amongst other things, a ’public walk’ and ‘open space’. Crucially, paragraph 15(1)(b) requires that such a ‘park’ within this wider definition is available for “free and unrestricted use by members of the public”.

This ‘free and unrestricted use’ requirement is considered to be the main test when considering whether property is a ‘park’ within the extended statutory definition.

Thus, where the general public have unlimited access to Forestry Commission land, those forests constitute a ‘park’.

3.5 ‘Open spaces’ within forests: The extended meaning of ‘park’

Rather than offering a comprehensive definition of a ‘park’, the exempting legislation provides examples of what may be envisaged by the word, including:

• a recreation or pleasure ground

• a public walk

• an open space within the meaning of the Open Spaces Act 1906

• a playing field provided under the Physical Training and Recreation Act 1937.

Section 20 Open Spaces Act 1906 defines ‘open space’ as “any land, whether enclosed or not, on which there are no buildings or of which no more than one-twentieth part is covered with buildings, and the whole or the remainder of which is laid out as a garden or is used for purposes of recreation, or lies waste and unoccupied”.

NB This definition refers to “any” land. This takes priority over the apparently restrictive adjective “open”. In ordinary speech one might not think to describe land covered with trees or water as “open space”; but if the statutory conditions are satisfied then any land, even land covered by trees or water, can be an “open space” within this definition.

Section10 Open Spaces Act 1906, to which S.20 relates, empowers:

“A local authority who have acquired any estate or interest in or control over any space or burial ground under this Act shall subject to any conditions under which the estate, interest , or control was so acquired :-

(a) hold and administer the open space or burial ground in trust to allow, and with view to, the enjoyment thereof by the public as an open space within the meaning of this Act and under the proper control and regulation and for no other purpose; and

(b) maintain and keep the open space or burial ground in a good and decent state,

and may inclose it or keep it inclosed with proper railings and gates, and may drain, level, layout, plant, ornament, light, provide with seats, and otherwise improve it, and do all such works and things and employ such officers and servants as may be requisite for the purposes aforesaid or any of them.”

These same principles have to be applied to the lands of the Forestry Commission, where there is free and unrestricted access by the public or the rights of the public remove in perpetuity any beneficial occupation by the Commission.

There must be free and unrestricted access by the public or no occupational benefits for the Commission from logging/forestry operations or commercial use.

But generally the concept of ‘a park’ is a broad one. See the VTE decision in Lake District National Park v Grace (VO) [the Glenridding Car Park case], at paragraph 20:

“…the case law and wording of the Schedule make it clear that the definition of a park goes beyond a typical local authority owned park in a town or city. It plainly contemplates … areas used for recreation by the public whether or not they are laid out formally as parks, and in some cases underpinned by statutory provisions, and in other cases not.”

Examples of exempt open-spaces include:

• a wetland board walk

• area of open land and ancient forest, eg Marston Vale (Bedfordshire)

• open moorland and sand/rubber walking/horse riding track, eg Horrocks Wood/Red Rose Forest (Bolton)

• area of open land/children’s play area, barbeque area, eg Beechenhurst, Forest of Dean

• more extensive open play areas, lake and adventure attractions, eg the snake pit, tree-top walk and other unique large scale wooden structures at Moors Valley Country Park (near Bournemouth).

However, again it must be emphasised that even an ‘open space’ has to be definable as a hereditament. This is important when it comes to considering ‘free and unrestricted access’.

3.6 ‘Free and unrestricted access’

A key requirement for exemption is that the ‘park’ should be available for free and unrestricted use, or given over in perpetuity to use, by members of the public - even if it is sometimes closed temporarily, whether at night or otherwise. This free and unrestricted use principle would be offended by, for example, the imposition of a toll or excessive parking charge.

This principle, which precludes the occupier from benefiting from the occupation, also applies to any ancillary property claimed to be exempt as an essential amenity to the park. However its strict application may be tempered if reasonable charges are made to cover the cost of its provision or to enable proper management of the facility.

However, where the facts clearly show that, beyond the sensible costs of its provision or management constraints, the relevant authority benefits from its occupation of the ancillary part, exemption will not be appropriate.

The concept of ‘free and unrestricted use’ has been explored in the following decisions:

1. In North Riding of Yorkshire County Valuation Committee v Redcar Corporation ([1943] KB 114), the corporation had bought the foreshore at Redcar under section 164 of the Public Health Act 1875. Section 164 of the 1875 Act authorised an urban authority to “purchase or take on lease lay out plant improve and maintain lands for the purpose of being used as public walks or pleasure grounds…”. The corporation then constructed swimming pools, a boating lake, a concert hall and other recreational facilities for the public’s use. Use of these facilities was subject to an admission fee. The public continued to enjoy free access to the foreshore itself, but the foreshore was not dedicated to the public. The Court rejected the corporation’s claim for rating exemption under the Brockwell Park principle. Viscount Caldecote CJ said (page 129):

“The basic principle on which the Brockwell Park case was decided was that, although the legal possession was vested in the county council, they were ‘merely custodians or trustees to hold it and manage it for the use of the public’. As Lord Halsbury said, the county council were incapable by law of using the park for any profitable purpose. They must allow the public the free and unrestricted use of it…I do not attach any importance to the fact that there is nothing to show any irrevocable dedication of this land and works and buildings to the use of the public, but, in truth and in fact, these hereditaments, taken as a whole, are not used so as to allow the public the free and unrestricted access of them…It is not disputed that it is necessary, in order to show that the corporation should be rateable, that their occupation should be a beneficial one…[The] test [is] that there is no beneficial occupation, if by law no benefit can possibly arise to the occupier. Applying that test, I think the corporation fail.” (emphasis added)

1. In Burnell v Downham Market UDC ([1952] 2 QB 55), the Court of Appeal held that a playing field held by a local authority on trust for the perpetual use by the public for the purposes of exercise and recreation pursuant to the Open Spaces Act 1906 was exempt from rates, on the authority of the Brockwell Park case. The Court held that it was sufficient for this purpose that the land in question be held on trust for the public’s use and enjoyment ‘for the foreseeable future’ (page 64).

2. In London County Council v Robinson (VO) ((1955) R & IT 455), the County Council resolved to declare a riverside strip known as the Riverside Walk as open space and to lay it out and maintain it as such pursuant to the Open Spaces Act 1906. The Lands Tribunal held that the effect was to bring the Riverside Walk itself “within the ambit of the decisions in the Brockwell Park and Downham Market cases”, i.e. to exempt the Riverside Walk from rates.

3. In Blake (VO) v Hendon Corporation ([1961] 3 All ER 601), the corporation had acquired land for use as a public park pursuant to section 164 of the Public Health Act 1875. The Court of Appeal held that the land having been acquired on that basis and the public having free and unrestricted use of the land for those stated purposes, the land was exempt for rates on the authority of the Brockwell Park case. The Court confirmed the view expressed in the Redcar case, that it was unnecessary to show an actual dedication to the public in order to gain the benefit of the exemption.

3.7 Working forests with restricted access cannot be exempt as parks

In ‘working forests’, where extensive arboriculture operations [such as brashing, felling and logging] occur, free and unrestricted access to the public is much less likely - for health & safety reasons, if no other. Specifically, working forests will not be regarded as a ‘park’ for one or more of the following reasons:

1.the necessary permanent restrictions preventing access by the public for forestry operations, eg culling deer, thinning, felling etc., mean that they are not available for free and unrestricted access by members of the public

2.the Commission derives sole benefit from its occupation of the forest by its forestry operations

3.the forests are not “open spaces” because they are neither gardens nor wholly used for the purposes of recreation nor do they lie wholly waste and unoccupied.

In other words, as exemption as a ‘a park’ turns on the question whether the land in question satisfies the principle requirement of free and unrestricted public access, if it does not do so, exemption cannot apply.

Whether the land is freehold or leasehold makes no difference. The notion of perpetuity [see the Brockwell Park case] has fallen away from the test relating to free and unrestricted use.

3.8 Park Exemption & amenities essential to public enjoyment of the park

Where a Forestry Commission property is exempt as a park, it is possible that facilities provided in connection with that forest may also be exempt as essential amenities of the park.

The question of rateability, or otherwise, of such amenities is often an important one because the rateable value involved can be significant.

The Forestry Commission may provide a number of facilities on its various sites. These include:

• Pay and display car parks

• Public conveniences

• Visitor centres, perhaps with an exhibition area and shop

• Franchise cafeteria or restaurant facilities, or kiosks

• Hire facilities [eg bicycles]

• Go-ape franchises and education centres. Occasionally, other franchise kiosks are present - ice cream, hot food etc.

None of these facilities will be exempt from rating unless:

a.some part of the forest is properly exempt as a park

b.the facility is truly an essential amenity to the part of the forest which is exempt as a park hereditament and cannot be considered as a hereditament in its own right

c.the main purpose of the facility is to assist or enhance the enjoyment by members of the public of those parts of the park to which they have access.

These key aspects have been considered in a number of decided cases:

- Sheffield Corporation v Tranter (VO) [1957] 2 All ER 583

This is the leading case on the treatment of ancillary parts of a park for rating purposes.

A park had been acquired and dedicated on trust by Sheffield Corporation for use as public walks and pleasure grounds. The park included a refreshment pavilion, which was let commercially to a tenant who sold refreshments to users of the park. The local authority also imposed other conditions, including the prices paid and where and when refreshments could be sold. The Court of Appeal held that the pavilion was exempt for rates as an essential amenity to the park. Lord Evershed MR said, at page 591:

“… it must be a question fact and degree in cases of this kind whether it can be said that the refreshment pavilion … is in reality still an inherent and essential part of the park as an entity, providing a necessary amenity for the park; or whether the hereditament has been so carved out as to acquire a distinct status from the park and to render itself liable for rating assessment.”

- London County Council v Robinson (VO) (1955) 48 R & IT 455

The Lands Tribunal held that a restaurant and cafeteria were not ancillary to a riverside walk. Rather, it was out of all proportion to what one would expect to find to meet the needs of members of the public seeking to enjoy the amenities of that riverside walk. It was a commercial undertaking in its own right and rateable on that basis. This reasoning clearly reflects the approach adopted by the Court of Appeal in the Tranter case.

- Lancashire County Council v Lord (VO) [1987] RA 153

Exemption of the Information Centre was appropriate because it was an essential amenity - not because the park could not operate without it, but because it had “no other purpose than to serve the objects of the park” (at p. 160 of the judgment). Articulated in this way, it is a high threshold.

- Lake District National Park v Grace (VO) Appeal Number: 092516784462/214N05

When considering a car park and information centre and premises at Glenridding, the Vice President of the Valuation Tribunal for England used Lord as the touchstone before formulating the relevant question at paragraph 4(e) of decision, as follows:

“The Question: Do the facilities provide any other use other than those of the park? If they do, is that use so very minor that they do not detract in any significant way from the purpose of the facility.”

Arguably this sets the bar higher than under the simple “main purpose” formulation set down in earlier cases.

Thus exemption will also extend to premises which are ancillary to the use of the forest exempt as a park [eg a refreshment kiosk] or those which have no other purpose than to enhance the attractiveness to the public of the forest exempt as a park hereditament. However, neither necessity nor essentiality is a critical feature in this regard, and exemption should not generally be refused because the facilities are not strictly essential to the public’s use of the exempt forest.

As the exemption only applies to facilities which have the main purpose of serving the exempt principal park hereditament, ie the forest, it does not apply to premises within the park which have a distinct and separate [“carved out”] status. It will be a question of fact and degree in each case whether or not there is a sufficient link between the principal exempt forest and the ancillary amenity. The following factors should be taken into account:

• Is the facility obviously commercial or a franchise? (eg a Costa Coffee café or a Go-Ape complex)

• Does the facility draw the public on its own merits? Or do the public, visiting the forest as a primary goal, only ever use the facility merely because it happens to be there?

• Are there any fees for the public use of the facility? If so, do these appear to be for more than mere administration or controlled management of the facility?

If the answer to these questions is ‘yes’ - then this indicates that the amenities are not exempt, as they appear not to be ancillary nor providing the public ‘free and unrestricted’ access and use.

Further considerations include:

• Facilities with competing users

Where a facility is used by the public specifically using the park and, say, general passing tourists, the facility is not used solely for the purposes of the park. Although the law is not clear on this point, and each particular case will turn on its own facts, it is doubtful that the judiciary would find that the mere fact that it is possible to look out of a café window at a park would of itself entail that the café was an essential amenity. [See the Lake District National Park, Glenridding, decision.]

• A profit-making enterprise

The fact that the amenity in question is a profit-making enterprise would not stop it being an essential amenity but it might prevent it being exempt under the doctrine of free and unrestricted use - eg extraordinarily high car-parking charges in comparison with, say, city centre car parks. If the cost is set too high, it could be a de facto charge to enter the park.

The question is whether, on a realistic analysis, the charge to use the amenity is actually a charge to use the park. Is the reality that the charge is a bar to access and therefore an infringement of the free and unrestricted use test? The amount of the charge is not the key: rather, the issue is whether the premises have no other purpose than to serve the park and whether the fact of the charge in reality means an absence of free and unrestricted use.

As the case law reflects the highly fact-specific nature of these cases, this is not an exact science. It may not always be easy to decide whether a facility within a park is an enhancing amenity or separate hereditament. So, although each case will need to be considered on its own facts, the following general guide-lines should be adopted: * ** Car parks:** ‘Pay and display’ car parks where nominal charges for parking are levied (or charges which are at a level which might reasonably be expected to do no more than cover the cost of the parking provision and administration) will normally be exempt.

• ‘Carved out’ facilities: There will be occasions when a facility is occupied and operated in such a way that ‘free and unrestricted’ access is denied to the public or alternatively controlled by some charge for admission or for service. In such circumstances, it becomes a separate and distinct hereditament ‘carved out’ of the park, see Tranter. A typical example might be a miniature railway - see Whitby (VO) v Cole (1987 RA 161). Such a hereditament will be rateable.

Following the Lake District National Park decision, further aspects to consider under this heading are:

a.Competing Use: As an example a restaurant/information centre may serve not only users of the ‘park’ but also ‘general tourists’ travelling round the area. Another example would be a car park used by commuters or workers in nearby premises as well as those using the park.

b.Excessive Charging: There will be occasions when a facility, such as a car park, is provided at a park hereditament and run at a high or penal cost to the public. This high entry cost is designed to make maximum profit and/or ensure that the public have little or no option but to pay if they wish to use the park. Such a charge will be a limitation on ‘free and unrestricted access’ to the park and go well beyond what is required for the proper running and management of the facility. A concert venue could also fall into this category.

In some circumstances, the principle of de minimis non curat lex may apply. However, please note that the VTE Vice President in the Lake District National Park case was not receptive to such line of analysis.

• Public conveniences, exhibition areas and cafeterias: The key issue is whether the facilities have no purpose other than to serve the objects of the park hereditament. If their true purpose is wider than that, the facilities will not be exempt.

• Go-Ape hereditaments etc, golf courses and hire franchises: These have a distinct and separate status. They attract customers from outside through advertising and dedicated booking facilities. Following the normal rules of rateability, they can be ‘carved out’ from the park hereditament to form separate units of assessment.

• Forestry Commission shops: These fall into two types:

a.Shops or kiosks selling only ice-cream or similar refreshments, with the main purpose of enhancing the enjoyment of the park hereditament by members of the public. These will be exempt.

b.Shops or kiosks selling more general ranges of items which cannot be said to have any connection with the enjoyment of the park. These should be treated as separate and distinct facilities, ‘carved out’ of the park hereditament and therefore rateable.

• Education and Play facilities: These also fall into two types:

a.Those where the education facilities compliment, or are focussed upon, the park - eg children’s activity or play sessions; explanation of facilities; drawing or painting pictures, etc. These will qualify for exemption.

b.Where the education provided by the Forestry Commission is linked to normal school activities, the National Curriculum or examination subjects. The use of such facilities will normally not be exempt.

• Camping sites, cabins, and residential blocks: When associated with Forestry Commission property, these are likely to be in the occupation of a separate company. This will make them separate hereditaments which fall outside the scope of this exemption.

• Mixed-use buildings: The exemption provisions in paragraph 15 are prefaced by the words “A hereditament is exempt to the extent that it consists of …”, which requires the application of a physical test, ie what is it and what is its use?

Thus, to take the example of a suite of Forestry Commission rangers’ offices:

a.Where the entire office space is entirely used in relation to park activities, it will be exempt.

b.However, if the offices are also used for other purposes in addition to those connected with the exempt park, and the exempt use areas cannot be differentiated from the rest of the space, the premises will normally be rateable.

3.9 Way-Marked Trails, Mountain Bike Trails and Courses

Forests with way-marked trails used by the public to walk, cycle or other recreation are likely to constitute a park.

However, some trails are also used for moving timber, or as fire tracks, as well as for walking and as cycle paths. Whilst each case has to be considered on its own facts, due the breadth of the definition of the definition of ‘a park’, it is a reasonable assumption that such tracks for walking and cycling would also fall within the definition of a park.

In contrast, logging trails and roadways (other than way-marked, riding and cycle trails) within working forests will generally have been constructed for extracting timber and other forestry uses and are exempt as agricultural premises as opposed to forming part of an exempt park.

On the other hand, way-marked trails using public highways, by-ways and bridle-ways or public rights of way which cross other privately owned land do not fall within the definition of ‘a park’ and are not exempt under paragraph 15. Similarly, neither is any ancillary amenity which is argued to be essential to such a public route.

When considering the free and unrestricted uses of way-marked trails on Forestry Commission property, factors to consider on the ground include:

• Have the walks/mountain and horse trails been set up as permanent features with established tracks and markings, eg wheel-chair access, cycle-routes, etc?

• Are any areas/paths which are used by the public shown on maps, sign posted and kept distinct from those which are used for forestry purposes? (eg signage indicating that certain paths are for the public, mountain bikes etc, or restrictive markings prohibiting access by the public and limiting access solely to foresters and workmen.)

• Having regard to the above factors, is it possible to identify ‘a park’ within the forest - one which may properly be said to be available for the free and unrestricted use by the public?

If these questions can be answered in the positive and a forest, or part of a forest, which constitutes a hereditament dedicated to the free and unrestricted use by the public can be identified, it will generally be exempt.

3.10 The overlap between ‘park’ and ‘agricultural’ exemptions:

In addition to being a ‘park’, Forestry Commission land may also qualify as ‘agricultural land’ under paragraph 2(1)(b) of Schedule 5 LGFA 1988, being “land used for a plantation or a wood or for the growth of saleable underwood”.

In contrast, the exclusions from the definition of ’agricultural land’ include, at paragraph 2(2)(a) of Schedule 5, “land occupied together with a house as a park” . However, it is unlikely that Forestry Commission forests will be occupied together with ‘a house as a park’ as envisaged by this exclusion. Moreover, if it had been Parliament’s intention could never constitute a park, this would have been made explicit.

It is therefore legally possible for the two exemptions to overlap and, thus, Forestry Commission land which is exempt as agricultural land under para 2(1)(b) can also qualify as a ‘park’.

However, ‘free and unrestricted access’ to agricultural land is not easily achievable, so the circumstances in which both exemptions apply will be infrequent. However, as an example, a wood that needs working on or felling, causing temporary closure at ‘night or otherwise’, would still be a ‘park’.

When considering recreational land use, a further exclusion from the definition of ‘agricultural land’, set out in paragraph 2(2)(d) of Schedule 5, is “land used mainly or exclusively for the purposes of sport or recreation”. This suggests there can be some subsidiary uses of the land such as if land was used mainly for grazing and a small part for recreational purposes. A ‘Maize Maze’ is an example of both agricultural land and recreational use which at times is both exempt and rateable, when charges are made for entry, the latter offending the free and unrestricted use rule.

3.11 Forestry Commission properties that are ‘mixed-use’ (agricultural and recreational), with amenities serving both parts:

The Forestry Commission generally enjoys exemption from rates under the agricultural exemption provisions where it occupies working forests. Depending upon the facts, forests may also be exempt as a ‘park’ hereditament. However, where working forests come only under the agricultural exemption provisions, rather than the park exemption, there can be no exempt occupation of any supposedly essential ‘park’ amenities (eg public car-parks etc.) because they do not qualify under the agriculture exemption provisions.

[But that is not to say that a building used in connection with forestry operations might not qualify as an exempt agricultural building. As ever, it would turn on the particular facts of the matter.]

Hence the ‘mixed use’ amenities will only be an issue where a forest hereditament is split between exempt use as ‘a park’ in one part, with the other part being a restricted (ie not open to the public) working forest enjoying exemption as agricultural property.

To resolve the issue, the manner of use of the amenity is critical: to what extent does it serve either that part of the forest characterised as a ‘park’ or, on the other hand, the restricted working forest and trails that constitute the agricultural premises? The two tests to be applied come from the decisions in Lancashire CC v Lord (VO). They are:

1.Does it have “no other purpose than to serve the objects of the park”?

2.Is its ‘main purpose’ to enhance enjoyment of the park by the public, following the decision in Blake (VO) v Hendon Corporation (No 2) (1965 RA 67)?

If an amenity fails the first test, then it cannot meet the second test.

To illustrate the point, a hypothetical example would be an open-plan Forest Rangers’ office used both for persons managing leisure activities in the forest and as an educational office delivering National Curriculum subjects. If the predominant use was by the leisure managers then the office may well be exempt as an ancillary to a ‘park’. Conversely, if the ‘educational use and staffing took precedence over the ‘park’ use, then this could not be an ‘essential amenity’ to the forest ‘park’.

As previously, the following factors should be taken into account:

*Is the facility obviously commercial or a franchise? (eg a Costa Coffee café or a Go-Ape complex)

*Does the facility draw the public on its own merits? Or do the public, visiting the forest as a primary goal, only ever use the facility merely because it happens to be there?

*Is there any payment by the public for use of the facility? If so, does this appear to be for more than mere administration or controlled management of the facility?

*Are the amenities used by any persons as part of their occupation of the working forest? (In contrast to use by visitors of the ‘park’ element.)

If the answer to these questions is ‘yes’ - then this indicates that the amenities are not exempt, as they appear not to be ancillary nor providing the public ‘free and unrestricted’ access and use.

4. Valuation

4.1 Commission forests and woodlands as “agricultural land”

The valuation method to be adopted for rateable hereditaments on Forestry Commission land will depend on the type of occupation:

a. Offices, workshops, stores etc

Premises of this nature are not considered to be exempt should be valued on the rentals method.

b. Franchises or concessions

A shortened version of the receipts & expenditure method of valuation should be used for these types of occupations, by adopting a percentage of gross receipts.

The Forestry Commission normally bases the lettings of franchises and concessions upon a percentage of gross income, with agreements for cafeterias and various hire premises being negotiated locally. Thus the terms and percentage adopted will vary considerably.

As landlord, the Forestry Commission will normally provide the building/premises for cafeterias, but in the case of hire facilities they may or may not provide premises - for example some hire franchises are housed in shipping containers brought onto site.

Accordingly, VOs should serve a Miscellaneous Gross Receipts form of return (VO6030) on all facilities of this type. Analysis of the information provided will show the general levels of percentage of gross receipts paid as rent by occupiers. In some of the larger joint Forestry Commission/Local Authority Country Park facilities significant percentages of gross receipts have been obtained as rent.

The Go-Ape franchise agreements are negotiated centrally by the Forestry Commission and it is understood there will eventually be a Go-Ape course in each of their forests in the UK.

See also:

Rating Manual: Valuation Practice: Valuation of all Property Classes: Leisure Attractions and the 2010 Practice Note 1: Leisure Attractions.

Appendix 1:

The Forestry Commission: Duties, powers and policies

The Forestry Commission was constituted under the Forestry Acts 1919 to 1945 and continues to exist in its present form by section 1(1) of the Forestry Act 1967 (“the Forestry Act”).

It consists of a Chairman and a number of Commissioners appointed by the Crown (referred to as the “Commission” in the remainder of this section). Schedule 1 to the Forestry Act makes detailed provision for the Commission and its staff.

Devolution has affected the statutory regime for forestry in relation to Wales and Scotland, but not in any manner that is material for present purposes.

The Commission has dedicated the majority of its land as “access land” under section 16 of the Countryside and Rights of Way Act 2000.

The legal powers and duties of the Commission are set out in Part 1 of the Forestry Act and sections 11 and 23 of the Countryside Act 1968. These can conveniently be summarised as:

1. Principal duties:

• to promote the interests of forestry;

• to develop afforestation;

• to produce and supplying timber and other forest products; and

• to establish and maintaining adequate reserves of growing trees.

In carrying out its functions, the Commission must, so far as may be consistent with the proper discharge of those functions, endeavour to achieve a reasonable balance between:

a.the development of afforestation, the management of forests and the production and supply of timber; and

b.the conservation and enhancement of natural beauty and the conservation of flora, fauna and geological or physiographical features of special interest. [The adjective ‘physiographical’ maybe defined as: Pertaining to the earth’s exterior physical features, climate, life, etc., and of the physical movements or changes on the earth’s surface, as the currents of the atmosphere and ocean, the secular variations in heat, moisture, magnetism, etc.; physical geography.]

The functions of the former Ministry of Agriculture, Fisheries and Food relating to forestry and to insects and pests destructive to trees and timber were transferred to the Commission, and they have extensive powers relating to the control of rabbits and vermin.

2. Principal Powers:

i.to manage, plant and otherwise use for the purpose of their functions under the Forestry Act any land placed at their disposal by the relevant minister (in so doing the Commission may build structures or undertake works thereon, and shall own any timber produced therefrom) (s.3(1) the Forestry Act);

ii.to manage and supervise woods and forests and give assistance or advice in relation to their planting or management (s.3(2) the Forestry Act);

iii.to purchase or otherwise acquire standing timber, and sell or otherwise dispose of any timber belonging to them or, subject to such terms as may be mutually agreed, to a private owner, and generally promote the supply, utilisation and conversion of timber (s.3(3)(a) the Forestry Act);

iv.to establish and carry on, or aid in the establishment and carrying on, of woodland industries (s.3(3)(b) the Forestry Act);

v.to require third parties to provide the necessary facilities for timber haulage (s.6(2) the Forestry Act);

vi.to undertake the collection, preparation, publication and distribution of statistics relating to forestry, and promote and develop instruction and training in forestry by establishing or aiding schools or other educational institutions or in such other manner as they think fit (s.8(1)(a) the Forestry Act);

vii.to make, or aid in making, such inquiries, experiments and research and collect, or aid in collecting, such information as they think important, for promoting forestry and its teaching, and publish the results and disseminate the information (s.8(1)(b) the Forestry Act); and

viii.to make, or aid in making, such inquiries as they think necessary for securing an adequate supply of timber and other forest products in Great Britain (s.8(1)(c) the Forestry Act).

3. Subsidiary duty – to have regard to amenity, recreation and conservation of natural beauty:

Like every Minister, government department and public body, the Commission must have regard to the desirability of conserving the natural beauty and amenity of the countryside in the exercise of their functions relating to land (s.11 Countryside Act 1968).

In the exercise of their functions under the National Parks and Access to the Countryside Act 1949 and the Countryside Act 1968, the Commissioners must have regard to the protection against pollution of any water which belongs to the Environment Agency or a water undertaker (viz. a company appointed by the secretary of state to provide water to the public) (s.38 Countryside Act 1968).

4. Powers to carry out subsidiary duty:

Without prejudice to that requirement, on any land placed at their disposal by the secretary of state, the Commission may plant, care for and manage trees in the interests of amenity (s.24 Countryside Act 1968).

On any land placed at their disposal by the Minister of Agriculture, Fisheries and Food, or in Wales, by the Secretary of State, the Commission may provide, or arrange for or assist in the provision of, tourist, recreational or sporting facilities and any ancillary equipment, facilities or works including, without prejudice to that generality, accommodation for visitors, camping and caravan sites, places for meals and refreshments, picnic places, places for enjoying views, parking places, routes for nature study and footpaths, information and display centres, shops in connection with any of these facilities, and public conveniences (s.23 Countryside Act 1968). They may make such charges as they think fit in connection with any such facilities and the sums received must be paid into the a central fund held by the Commission for the exercise of its functions (under the terms of s.41(6) and (2), etc. Countryside Act 1968), subject to any profit-sharing agreement with a third-party as authorised by the Treasury (s.23(2A) Countryside Act 1968).

5. Creation of Forest Enterprise

The Commission’s information sheet “History of the Forestry Commission” states that: ”By the 1990s the Commission was committed to multi-purpose forestry. The demands of commercial production, recreation and conservation were carefully balanced….”

In 1996 the Commission set up its executive agency, Forest Enterprise, for the purpose of managing 800,000 hectares of forests and woodlands in public ownership. The main aims of Forest Enterprise are stated to be:

• to maintain and increase the productive potential of the forest estate;

• to increase opportunities for public recreation;

• to increase the conservation value of its forests;

• to increase the net value of commercial activities.

The total forest estate of 800,000 hectares is stated to be “mainly productive forest with complementary land for grazing, conservation and recreation.” Forest Enterprise employs 3,500 staff, with a further 3,000 people working in the forests as contractors or employed by timber purchasers. The forest estate in England and Wales comprises some 395,000 hectares, of which approximately 80% is planted. The balance is largely used for “environmental purposes”. Since Welsh devolution, the Commission has devolved Forest Enterprise’s activities to a separate executive agency within Wales. The Commission states that:

“Working forests still form the backbone of Welsh forestry, which contributes some £400 million of gross output per year to the economy in Wales and provides just over 4,000 jobs. However, today the Commission must balance these considerations with other social and environmental factors.”

As a matter of policy, the Commission now operates under separate strategies for England, Wales and Scotland. The Commission published its policy documents “England Forestry Strategy” in December 1998 and “Woodlands for Wales” in July 2001. These strategies set out the priorities and programmes for developing and implementing forestry policy in those countries.

6. The Commission’s forestry strategy for England

This strategy is based upon 4 key programmes:

1.forestry for rural development, which embraces forestry’s contribution to the rural economy and timber and marketing opportunities;

2.forestry for economic regeneration, which focuses upon the role of forestry in regenerating land through the planning process;

3.forestry for recreation, access and tourism which is self-explanatory and focuses upon more and better public access to woodlands for both recreation and tourism; and

4.forestry for the environment and conservation, which embraces the role of woodlands in conserving and enhancing the character of England’s environment and cultural heritage.

Forestry Strategy for England (1988) emphasizes that these 4 programmes are intended to complement each other and to provide the foundation for an integrated approach to management and use of the forest estate on behalf of the nation. ‘Woodlands for Wales’ sets out the corresponding programme for Wales.