One House But Two Council Tax Bands

trickydicky802

This question arose from another thread, but I felt it merited its own thread rather than derail the other.

So, my wife and I own a house with a self-contained, but internally connected 'granny annexe'

The entire property has a single legal title, duly registered at land registry.

However, the house and granny annexe have separate council tax bandings and separate addresses listed in the Post Office Address File (PAF).

My 80+ year old 'dependent parents' live in the 'granny annexe' and we therefore qualify for council tax exemption on the annexe. This situation has existed for about 12 years.

The question I have is about what comprises our 'main residence' and what, if any, CGT implications there might be if we were to sell the property. I understand that only a main residence is exempt from CGT when a property is sold.

I would argue that the entire property is our main residence because:
1. There is only one legal title
2. The house and annexe are internally interconnected
3. I have free-reign throughout the entire property (no tenancy agreement in place for the annexe)
4. Utilities are shared throughout the entire property and all accounts are in my name
5. As things stand (ie only one legal title) it is only possible to sell (or even value) the whole property

However, doubts have been raised that the annexe portion of the property might not be classed as our main residence because:
1. It has a separate council tax band (albeit in my name)
2. It is my parents main residence so cannot also be part of our main residence
3. It has a separate PAF address and a main residence cannot have two addresses


Any thoughts?

Slithery

Please can we keep this to one thread, otherwise it gets confusing...

https://forums.moneysavingexpert.com/discussion/6036654

trickydicky802

But this is for a completely different question . . .

lincroft1710

The property is 2 dwellings for CT purposes only.

For everything else it is a single indivisible property.

trickydicky802

Thank you - that's exactly what I wanted to hear! Does anyone else disagree?



Any ideas about how it might have had two CT bands applied (I think the annexe was once rented out before our time)? Can homeowners simply request a re-banding at any time?

CIS

The annex will have been banded as a self contained unit.Unless the situation has changed then the banding will not be removed.



If you think that the situation has changed then you can ask the valuation office to make the relevant determination.

trickydicky802

Would that determination likely to have been made at the time CT was first introduced or later if the annexe was subsequently rented out under a formal tenancy agreement? Just curious about how it came to be.


Also, am I correct to think that a 'self contained unit' is defined by such things as having its own kitchen and bathroom and front door (plus other rooms as well) and that it is irrelevant whether or not it connects internally to the rest of the property?

CIS

Also, am I correct to think that a 'self contained unit' is defined by such things as having its own kitchen and bathroom and front door (plus other rooms as well) and that it is irrelevant whether or not it connects internally to the rest of the property?

There are 2 real ways a property can be banded - 1) it is its own identifiable property (i.e it is clearly a self contained flat or a house or 2) it is a self-contained unit within/attached to another property.

Self-contained for council tax just means it is capable of separate occupations - it doesn't have to have any facilities at all.

Would that determination likely to have been made at the time CT was first introduced or later if the annexe was subsequently rented out under a formal tenancy agreement? Just curious about how it came to be.

Depends on when the VOA became aware of it.

lincroft1710

trickydicky802 wrote: »

Also, am I correct to think that a 'self contained unit' is defined by such things as having its own kitchen and bathroom and front door (plus other rooms as well) and that it is irrelevant whether or not it connects internally to the rest of the property?

This is basically correct

daisyfrau

My understanding is that the annexe need not have its own front door to be counted as a separate residence. Even if it can ONLY be accessed by non living-room areas (eg kitchen, kitchen-diner, utility room) in the main house it can still be classed as self-contained for council tax purposes. It also need not have both a kitchen and bathroom, it could just have a bathroom and still count. I live in a pretty tough VOA area (Wokingham/Reading) and they seemingly band properties upwards for minutiae IMHO.

Please someone correct me if I’m wrong but I have heard horror stories about this.
Edit: eg https://forums.moneysavingexpert.com/discussion/6005097annexe+council+tax

CIS

Even if it can ONLY be accessed by non living-room areas (eg kitchen, kitchen-diner, utility room) in the main house it can still be classed as self-contained for council tax purposes

Correct.

It also need not have both a kitchen and bathroom, it could just have a bathroom and still count

Correct