Council Tax

Robot27

Hi,

I've inherited a modest flat and it will be officially transferred into my name on the 10th January 2020. From this point I'm liable for council tax of which I expect to pay.

I have already started the wheels in motion to sell the flat and no one will be living in it. Let's say I sell the flat within 3 months.

I have these questions:-

1) As Council tax runs from April 1st - March 31st, will I be liable for CT from the period it becomes mine until April 1st? ie..... January 10th to 31st March?

2) On January 10th, will I have to pay a full 12 months of CT?

3) If 2) is the answer, and I was to sell the flat three months after it becomes mine, ie April 10th. Would I be entitled to a refund.... ie 9 months worth of CT?

Thank you

MovingForwards

1. You're liable til the property sells, you may get a discount if it's unfurnished, or if it's a second home for you til it sells there may be a higher charge.

Look on the council website.

2. No, they will pro-rata it. Date it's yours til end of their tax year.

3. If you pay in full and the sale completes before the end of tax year you will get a pro-rata refund of council tax.

Why is the property being transferred to you then being sold instead of the estate selling it and giving you the proceeds?

You sound like you have never owned or rented before, if you have never owned a property anywhere, by transferring the property to your name you will loose your first time buyers perks, if you have a H2B ISA you can't claim the bonus etc.

Robot27

@ MovingForward thank you for clarifying things.

I've never owned a property that is correct, I currently live in a rented property.

I should have said in first post, but I am inheriting a family member's property who died. I get the property as a beneficiary of the will. The executor has been in charge of everything throughout the probate process and through the probate being granted. It will be officially in my name as of 10th January..

lincroft1710

Most people pay CT monthly either over a 10 or 12 month period. Your council may require the payment from 10 Jan 2020 until 31 March 2020 in one lump however. If not and in any case after 1 April, pay monthly either by cheque or Direct Debit.

CIS

If you're in England, then you have the statutory rights to spread the payment over 12 months (or the remaining months in the year). If they ask for payment in one go then tell them you want it spread, it'll not give much extra but it's better than nothing.

Keep_pedalling

Robot27 wrote: »

@ MovingForward thank you for clarifying things.

I've never owned a property that is correct, I currently live in a rented property.

I should have said in first post, but I am inheriting a family member's property who died. I get the property as a beneficiary of the will. The executor has been in charge of everything throughout the probate process and through the probate being granted. It will be officially in my name as of 10th January..

You would be far better getting the executor to sell it and take your inheritance in cash. Having the property in your name means you lose your first time buyer status which will cost you when you do buy a property for your own use.

MovingForwards

∆∆∆ this, don't take for granted the benefit of FTB status.

Speak with the executor and ask them to sell it without transferring it to your name.

Uxb1

Keep_pedalling wrote: »

You would be far better getting the executor to sell it and take your inheritance in cash. Having the property in your name means you lose your first time buyer status which will cost you when you do buy a property for your own use.

Note though that if the property has gone up in value over it's estate valuation as of the date of death of the deceased then there will be a CapGainsTax element for the estate to pay out of somewhere - either the property receipts (so the OP gets less) or the estate residuals (so the residual beneficiaries get less) depending on how the will is written
....and unlike people, estates do not get a nill band for CGT calculations; every single penny of gain is taxable.

I suspect the way out (if this higher sale price occurs) will be to say the original valuation was wrong and if there is a reasonably short time between the date of death and the property sale this will be accepted by HMRC and that the estate valuation for the flat will be the sale price of the flat. Note further that if this was only a small part of a much larger estate and if the estate was paying any IHTax then this would have to re-visited and recalculated at the higher property valuation and the extra IHtax paid out of the residual estate before it gets distributed.

Edit - just had a thought: It might also be not so simple for the estate to sell if there is no written provision in the will for how the expense of selling are to be accounted for. If the residual beneficiaries are not in the part the OP then they will not want their part diluted by the costs of the selling being borne by the general estate.

00ec25

Uxb1 wrote: »

....and unlike people, estates do not get a nill band for CGT calculations; every single penny of gain is taxable.

misleading
The allowance is available, but is time limited

executors / personal representative are entitled to the AEA for the tax year in which the death occurred and the following 2 tax years. After that there’s no tax-free allowance against gains during the administration period.