
PRESTON TAIT  2000 TRANSITION SCOTLAND 
TRANSITION
Transition can be a penalty or a subsidy depending on whether
the R.V. has increased (losers) or decreased (gainers).
Actual increases or decreases in rates payments due to a change in R.V.
will be geared to the previous years liability.
The original idea of transition was to spread the impact of revaluation
more evenly. Those to pay less capped in order to help those who should
be paying more.
Each year any property suject to transition also has it's rates bill increased
by inflation as follows:
2000  2001 
1.1% 
2001  2002 
3.3% 
2002  2003 
1.7% 
2003  2004 
1.7% 

WHERE TRANSITION IS NOT APPLICABLE
 DEMOLITIONS ETC.
Any reduction to a rateable value with an effective date after 1st April
due to a part demolition of the premises or some other alteration will
have the ratio of that reduction applied to rates payments so that for
example where a property had been increased in value by 10 times at the
revaluation but was subject to transition ( where the actual payments were
only increased by 10%) , a demolition of half of premise would lower the
rates bill by a half, whereas any reduction as a result of an appeal with
a 1st April effective date may have made no difference to payments. This
is known as an N over J fraction.
(N being the revised value, J being the original value). EXAMPLE
Property at £10,000 in 1999 increased to £100,000
in year 2000.
Rates payments only increased from £4,890 by 10% plus inflation to £6,454.
Property then half demolished in May 2001 reducing the rateable value to £50,000.
By N over J (£50,000 over £100,000) the rates payments are reduced by a
half with effective date 1st May 2001.
If the property had been overvalued and
appealed to £50,000 as at 1st April
2000 (with no demolition having taken place) the new theoretical liability
would be £50,000 at 41.6 pence or £20,800 still way above the transition
limit of £6,454 with no immediate difference to payments. 
SCOTLAND INCREASES IN RATEABLE VALUES
SMALLER PROPERTIES (RV under £1000) For those faced with an increased rateable value the drop in the uniform
business rate will help to offset any increase in valuation. In any
event payment will not increase by more than 5% for small properties
(under 10,000) in the first year of the revaluation. That transition
difference will then be reduced by 25% in each subsequent year.
Example:
1999 payment R.V. £8,000 @ 48.9p Paid £3,912
2000 Revaluation R.V. increased to £10,000
£
10,000 @ 45.8p Payable £4,580
But limit £3,912 plus 5% = £4,107 plus inflation LARGER
PROPERTIES (RV over £10000)
For those faced with an increased rateable value (properties over £10,000)
the drop in the uniform business rate will help to offset any increase
in valuation. In any event payment will not increase by more than 7.5%
in the first year of the revaluation rising by 25% of the transition
difference in each subsequent year.
Example:
1999 payment R.V. £27,000 @ 48.9p Paid £13,203
2000 Revaluation R.V. increased to £46,000
£
46,000 @ 45.8p Payable £21,068
But limit £13,203 plus 7.5% = £14,193 (plus inflation)
In 2001 transition difference is reduced to 0.77 of the original amount
In 2002 to 0.678
In 2003 to 0.261

SCOTLAND DECREASES IN RATEABLE VALUE
SMALLER PROPERTIES ( R.V. UNDER £10,000)
Unfortunately those who have a reduction in their R.V. will hardly
benefit as the limit on payment for small properties will be a 5% drop
on the previous years bill with inflation added back. For each subsequent
year the transition difference is reduced by 25% each year until 2004
when transition disappears altogether.
Example: 1999 payment R.V. £10,000 @ 48.9p Paid £4,890
2000 Revaluation R.V. decreased to £9,000
£
9,000 @ 45.8p Payable £4,122
But limit £4,890 less 5% = £4,646 plus inflation. PROPERTIES OVER £10000.
The situation is the same for large properties with a decreased valuation
where the limit on any reduction in payment is also 5% with inflation of
2.5% added back then for each subsequent year the transition difference
is reduced by 25% each year until it disappears in 2004.
Example: 1999 payment R.V. £46,000 @ 48.9p Paid £22,494
2000 Revaluation R.V. decreased to £26,000
£
26,000 @ 45.8p Payable £11,908
But limit £22,494 less 5% = £21,369 plus inflation.
Next year the transition difference is reduced by 25%
In 2001 transition difference is reduced to 0.77 of the original amount
In 2002 to 0.678
In 2003 to 0.261

