Paragraph 3 Type 3 – The owner or occupier exhibits particular characteristics or behaviours

(1)

An arrangement is an artificial arrangement for the purposes of section 63H(1)(a) of the Act when one or more of the following applies in relation to the hereditament—

(a)

the owner, occupier or person who granted the lease, tenancy or any other form of agreement for occupation failed to provide the name of the ratepayer in response to a request for such information under paragraph 5(1B) of Schedule 9 to the Act^f1 within the period specified in paragraph 5A(1)^f2 of that Schedule;

(b)

the arrangement makes a person (“P”) the ratepayer and P has no connection to the operation or economic activity taking place on or in relation to the hereditament;

(c)

the arrangement, between a person (“L”) who granted the lease, tenancy or any other form of agreement for occupation and another person (“P”), makes P the ratepayer and, on the day the arrangement was entered into, P was an employee, contractor, partner or close relative of L;

(d)

the arrangement makes a person (“P”), or a company, firm or trust for which P is a director, partner, charity trustee or an individual with significant control, the ratepayer and on the day the arrangement was entered into, one or more of the following applies—

(i)

within the previous 2 years, P had been convicted under section 767(1) of the Companies Act 2006 of doing business or exercising any borrowing powers of a public company which did not have a trading certificate;

(ii)

within the previous 2 years, P was subject to a declaration issued by a court for fraudulent or wrongful trading under section 213(2), 214(1), 246ZA(2) or 246ZB(1) of the Insolvency Act 1986^f3, or article 177 or 178(1) of the Insolvency (Northern Ireland) Order 1989^f4;

(iii)

P was disqualified from being a company director, either by virtue of a disqualification order or a disqualification undertaking under section 1 or 1A of the Company Directors Disqualification Act 1986^f5, or article 3 or 4 of the Company Directors Disqualification (Northern Ireland) Order 2002^f6, without the leave of the court to be a director in respect of the ratepayer;

(iv)

P was disqualified from being a charity trustee or trustee for that charity under section 178 or 181A of the Charities Act 2011^f7, section 69 of the Charities and Trustee Investment (Scotland) Act 2005^f8 or section 86 of the Charities Act (Northern Ireland) 2008^f9;

(v)

within the previous 2 years, P was convicted of an offence under section 216 of the Insolvency Act 1986^f10 or article 180 of the Insolvency (Northern Ireland) Order 1989^f11 (restriction on re-use of company names);

(vi)

P was subject to a bankruptcy restrictions order, an interim bankruptcy restrictions order, or a bankruptcy restrictions undertaking, under Schedule 4A to the Insolvency Act 1986^f12, Part 13 of the Bankruptcy (Scotland) Act 2016^f13, or Schedule 2A to the Insolvency (Northern Ireland) Order 1989^f14.

(2)

In sub-paragraph (1)(c), “close relative” means a parent, adoptive parent, step-parent, parent-in-law, son, son-in-law, daughter, daughter-in-law, step-son, step-daughter, adoptive son, adoptive daughter, brother or sister (whether of full-blood or half-blood), step-brother, step-sister, or the partner of any such person.

(3)

In sub-paragraphs (1)(c) and (2), “partner” means—

(a)

the husband or wife or civil partner of that person, or

(b)

if the person is living together with another person as if they were a married couple or civil partners, that other person.

(4)

In sub-paragraph (1)(d)—

“charity trustee” (“ymddiriedolwr elusen”) means a person who falls within the definition of “charity trustees” in section 177 of the Charities Act 2011;
“firm” (“ffyrm”) means any other entity, whether or not a legal person, that is not an individual and includes a body corporate, a corporation sole and a partnership or other unincorporated association.

Annotations

Footnotes

f1: Paragraph 5(1B) was inserted by section 151(2)(b) of the Local Government and Elections (Wales) Act 2021 (asc 1).
f2: Paragraph 5A was inserted by section 72(4) of the Local Government Act 2003. Paragraph 5A(1) was amended by section 151(3)(a) of the Local Government and Elections (Wales) Act 2021. Further amendments to paragraph 5A(1) will be made by virtue of paragraph 13(2)(e)(i) of the Schedule to the Local Government Finance (Wales) Act 2024 on a date to be appointed.
f3: Section 213(2) was modified by sections 21(5) and 25 of the Company Directors Disqualification Act 1986. Sections 246ZA and 246ZB were inserted by section 117(2) of the Small Business, Enterprise and Employment Act 2015.
f4: S.I. 1989/2405 (N.I. 19), amended by S.I. 2009/1941. There are other amendments not relevant to this instrument.
f5: 1986 c. 46. Section 1 was amended by section 5(1) and (2) of, and paragraph 2 of Schedule 4 to, the Insolvency Act 2000 (c. 39) and paragraph 2(2) of Schedule 13 to the Finance Act 2024 (c. 3). Section 1A was inserted by section 6(2) of the Insolvency Act 2000 and amended by paragraph 2(3) of Schedule 13 to the Finance Act 2024.
f6: S.I. 2002/3150 (N.I. 4). Articles 3 and 4 were amended by paragraph 9(3) and (4) of Schedule 8 to the Small Business, Enterprise and Employment Act 2015. Article 3 was also amended by S.I. 2005/1454 (N.I. 9).
f7: 2011 c. 25. Section 178 was amended by sections 4(5) and 9(3) to (6) of the Charities (Protection and Social Investment) Act 2016 (c. 4) and paragraph 9 of Schedule 3 to the Sanctions and Anti-Money Laundering Act 2018 (c. 13), and S.I. 2012/2404, 2016/481, 2019/466, 2019/573 and 2019/577. Section 181A was inserted by section 10(2) of the Charities (Protection and Social Investment) Act 2016 and amended by S.I. 2016/997.
f8: 2005 asp 10. Section 69 was amended by paragraph 211 of Schedule 8 to the Charities Act 2006 (c. 50), paragraph 107 of Schedule 7 to the Charities Act 2011 and sections 4(2) and 5(2) and (3) of the Charities (Regulation and Administration) (Scotland) Act 2023 (asp 5).
f9: 2008 c. 12. Section 86 was amended by paragraph 138 of Schedule 7 to the Charities Act 2011 and section 3(3) of the Charities Act (Northern Ireland) 2013 (c. 3).
f10: Section 216 was modified by sections 21(5) and 25 of the Company Directors Disqualification Act 1986. There are other amendments and modifications which are not relevant to this instrument.
f11: S.I. 1989/2405 (N.I. 19), amended by S.I. 2009/1941.
f12: Schedule 4A was inserted by section 257 of, and Schedule 20 to, the Enterprise Act 2002 (c. 40) and amended by paragraph 63 of Schedule 19 to the Enterprise and Regulatory Reform Act 2013 (c. 24) and section 135(2)(b) of the Small Business, Enterprise and Employment Act 2015.
f13: 2016 asp 21.
f14: S.I. 1989/2405 (N.I. 10); relevant amending instrument is S.I. 2015/1455 (N.I. 19).