Main Residence? - CGT / Council Tax

rendellt

Hi All,
I have recently started a new job away from the house I own.
I am looking to rent somewhere near my new job (to be shared with a friend who is also working in the new area.) this will be used to live in during the week, making travelling to work easier.

I still go to my own house most weekends, but it is quite far away.
I rent out a room in my own house to another friend (this is tax free on rent- a -room relief, so I don't have to declare, right??)

I will be filling in the electoral register soon.
There will be an electoral register for my new rented place, and there is currently one for my own home, both of which need filling in.
I am assuming that the electoral register goes to make up the names for council tax purposes??

Should I pay council tax (and go on the electoral register) at the rented place or my own home?
It would be easier to go on the electoral register in the rented place (for voting!) and pay council tax on that, and let my friend, who is renting a room in my own house, pay the council tax there.

I may sell my own home in a few years time, depending on how the new job goes.
For CGT reasons, WHERE IS MY MAIN RESIDENCE over the next year or so?

I'm not sure if my friend at my own home would be OK with me going on the electoral register there, but paying towards the council tax at the new, rented place.
Likewise, I am not sure if my new friend, in the rented place would like it if I paid council tax on my own home, lumping him with the whole bill for the house that I spend my weekday time in, with them.

Any advice would be great, I feel this is a little complicated at the moment.???

Cheerio

DavidLaGuardia

Being on the electoral register has nothing to do with the requirement to pay council tax which is due on each property. Specifying your loadger as the only permanent resident may get a 25% discount as would apply to any single occupancy but I admit to not knowing how the rules apply to a temporary residing landlord.
On CGT it has been permissible to have a work residence in addition to a main residence that does not attract CGT and there are IR gudiance notes on this (I'll come back with a reference to this)

Rafter

Since you are only planning to own one home there are no problems about capital gains tax as this will be your principle private residence.

I suggest you register on the electoral roll in the place where you want all your bills send etc, otherwise applying for new credit might be difficult.

The rent a room scheme is just that, a payment to rent a room in another persons house inclusive of utility bills including council tax.

If you start charging your lodger bills and council tax and this takes him over the rent a room limit there may be some tax payable.

I think you are allowed to charge for variable costs such as telephone useage. The inland revenue website should give you chapter and verse about the detailed rules.

You may be able to reduce the council tax bill on your owned property by claiming that it is single occupancy.

Good luck.

R.

Plumpud_3

I would strongly advise you to contact your own Tax Office to get a ruling on this.

Rent-a-room relief is only allowable if the landlord is resident in the property at the time the room is rented out. You will be absent more than 50% of the time.

If it is decided that rent-a-room is not applicable, and that it is straight forward 'income from property', then CGT will come into play. You can may a formal election regarding your principal private residence, but you are time limited on this.

With regard to the electoral roll and council tax. You should only complete the electoral roll of the place you wish to vote. You will have to register with both local councils with regard to council tax. Under the new regulations you will probabley be charged 2 lots of council tax, regardless of which you consider to be your main home. My understanding that from 6/4/04 local councils could charge full council tax on 'second homes'. Prior to that they charged 50%. Look on the back of your council tax bill, it gives excemptions and reductions there. Remember the policy of your present local council may not be the same as the new property's local council - you need to check with them too.

I think you may find that you might be better off to stay in the new property more and return to your own property occassionally, as a guest of your tenant, having made a relevant CGT election.

My friend lived alone and therefore paid 75% council tax. Her boyfriend had been seriously ill and in hospital. When he came out, he was too ill to live on his own, so he stayed with her. She only paid full council tax for the time he stayed, 6 weeks. You could try something along those lines. Your single tenant pays 75% council tax - get him to pay council direct, not part of rental income then - you pay up to full council tax based on the time you are in the property.