After the revaluation on 1 April 2010, the new rateable values are based on rental values as they stood on 1 April 2008 but will only effect bills from 1 April 2010.
The property market has changed a good deal between the 2005 and 2010 revaluations and the transitional scheme is to phase in the effects of these changes by limiting increases and decreases in bills.
To help pay for the limits on increases in bills, there also has to be limits on reductions in bills. Under the transition scheme, limits continue to apply to yearly increases and decreases until the full amount is due (rateable value times the appropriate multiplier).
The scheme applies only to the bill based on a property at the time of the valuation. If there are any changes to the property after 1 April 2010, transitional arrangements will not normally apply to the part of a bill that relates to any increase in rateable value due to those changes.
See GOV.UK - Transitional Rate Relief for further information about transitional arrangements.