House Sale/Council Tax quandry

jessmjc

My home has a small 2 bedroom cottage attached to it. I have privately been renting out this cottage for the last 10 years.

I have only been paying council tax on the main residence and have never paid council tax on the cottage.

I now want to sell up both house and adjoining cottage. Will I get found out ? What should I do ? I could knock a doorway through to the cottage if necessary.

Could I be liable to pay back what I owe after it was sold ? I could claim no one has ever lived there ?

clutton_2

so you may owe the council ten years worth of tax - £10k - and you want our help to avoid paying it ? sorry ... no help from me matey

puddy

well the occupier pays the council tax, you would only pay for unoccupied periods and then you might have got a 50% discount because it was empty, however, if you owe backpayment they may not give this to you.

however, it depends whether it even was listed as a seperate dwelling on the council tax records. was it?

jessmjc

Yes - it was listed as a standalone property.

itsalldrivingmemad

Were the tenants paying council tax when you rented it out - do you hvae a tenancy agreement for this/these periods?

FraudBuster

Admitting fraud on a public forum is not advised.

Capital Gains Tax liability?

PasturesNew

Council Tax was due at all times on the 2-bed property, whether it is joined to yours or not. Even granny annexes on houses are banded separately.

You'd be liable for council tax for the whole period, unless a tenant has been paying the council tax, which would be normal. If a tenant has been paying council tax, then you'd be liable for the missing bits. However, as you've not been asked for the gaps, I am confused as to why not, perhaps the property hasn't been registered as separate (which legally it should have been from the start).

You will also be liable to pay income tax on all that rent (after costs).

When you sell, you will also be liable to pay Capital Gains Tax on the profits.

You need to get this sorted properly, without trying to cheat, because if you get caught out (and you most likely would) the Govt take a very dim view on tax fraud and underpayments.

Update: and reading your other posts you won't be short of a bob or two as you own your £300k house outright, you're about to get/got £100k from your parents and you have £75k in savings (unless that was the residue of the parent's £100k gift). Plus your gf lives with you so you've got cheap/shared running costs.

Just cough up.

FraudBuster

OP should be able to pay the taxes and fines.

75000 - ING or ICESAVE or ICICI

Views: 359
Posted By jessmjc
75000 - ING or ICESAVE or ICICI

Folks

I've now got £75000 in my ING web saver account which I think pays about 5.4%. I take monthly interest from this. I'm a basic rate taxpayer.

If I were to transfer this to a ICICI or an...

clutton_2

give me strength ..................

Newbird

Clutton.... you made me smile

lincroft1710

If the cottage is listed as a separate dwelling, it is highly improbable that council tax hasn't been paid - even if it hasn't, billing authority can only ask for seven years back money.