Council Tax, fixed abode & capital gains

krco86

Hi,

I'm not sure if this is the right section to post this or not but I am hoping someone can help me answer my query.

I am getting married this summer and both my partner and I have a house. The plan is to live with my wife to be and rent my property out.

I have been reading up around renting property out etc and noticed that if I changed my fixed abode to my partners address I would then be subject to capital gains on my property.

The first question I have is does it matter what your registered fixed abode is? Does it have to be your permanent address and could I leave my fixed abode as my property to potentially avoid any capital gains should I eventually sell my house? Or is this illegal.

If I can declare my property as fixed abode does my partner then still have to pay 100% council tax or reduced 75% as she would be the only person with a fixed abode at her address.

Any help or experience would be appreciated. Thanks

anselld

It has to be where you live.
If you live together that is you Private Residence for the purpose of CGT relief and you will pay 100% Council Tax.
You will still have various reliefs on your former home when you come to sell including PPR for the time you lived there and Letting Relief.

antrobus

krco86 wrote: »

...The first question I have is does it matter what your registered fixed abode is? Does it have to be your permanent address and could I leave my fixed abode as my property to potentially avoid any capital gains should I eventually sell my house? Or is this illegal. ....

As previously suggested, in order to qualify for Private Residence Relief you do actually have to live there, and it does have to be a main residence. If you are renting out your former home to some tenants, then clearly they are living there not you.

Since you will be obliged to complete a tax return informing HMRC of the rental income received from this property, where you at any time to claim that you were in fact living there when you weren't, they might well be able to work out that you were fibbing.:)

krco86 wrote: »

..If I can declare my property as fixed abode does my partner then still have to pay 100% council tax or reduced 75% as she would be the only person with a fixed abode at her address...

For Council Tax purposes a married couple share one main residence.

G_M

As above.

This may also help:

Tenancies in Eng/Wales: Guides for landlords and tenants

Bill23h

how are you going to rent it out, when its your 'main abode'? Or were you thinking of evading tax on the rental income as well?


What you propose is illegal, and could result in a prison term or large fine.

krco86

That's why I asked the question as I wasn't sure. I am not trying to fiddle anything but can't find any information and was going to phone the council up and ask the same question

Thanks all for the comments.

CIS

That's why I asked the question as I wasn't sure. I am not trying to fiddle anything but can't find any information and was going to phone the council up and ask the same question

The property you're living in together would be your 'sole or main residence' for council tax purposes and the 25% discount would no longer be applicable on that property. Your other home would be regarded as a 2nd home.

The council would make the decision on residence, this would almost certainly be the property with your wife.

booksurr

in summary

council tax: you cannot claim 25% single person discount once you get married as your home is where your wife is and the other property will either be:
a) classed as a second home (and so liable to whatever discount that council gives, they have discretion of between 0% - 50%, most, for obvious reasons, now give 0%)
or
b) tenanted, so not your liability at all (unless you let it as an HMO!)

CGT: once you get married you and your wife can only have one (exempt) main residence between the pair of you. You could nominate your old home if you want, even if you are living elsewhere with your wife, but you cannot continue to claim exemption when it is tenanted as it is then no longer available for use by you as a home. If you do make such a nomination then the property you live in with your wife will not be exempt and you will incur CGT liability on it. How much CGT you would have to pay and therefore which of the 2 properties is best to claim exemption on requires answers to many, many, more questions...