Probate... Who should pay council tax?

CIS

RonsDaughter said:

CIS said:

RonsDaughter said:

My mother died October 2019 but my brother (who owns his own house that he pays council tax on) used her property to store items for his market stall business. The local council are charging him council tax for both his own home where he sleeps, and for my mothers house where he stores his goods. This is currently under review, but looks likely he will have to pay for both properties. Probate was granted in January and we have until June to sell the property etc, however, if the house remains unsold, will my mother's estate have to foot the council tax bill, or should my brother continue to pay as he will continue to use the house? The house also still contains my mother's belongings. 

This is an area where s6 of the LGFA 1992 needs to be considered.

Unless he is a resident of the property (which he is not) then liability rests in the hands of the non-resident owner. The non-resident owner is the party with the lowest legal interest that has been granted to them for a period of 6 months or more (i.e a 12 month tenancy is inferior to a 100yr lease, so a non-resident the tenant would be liable rather than the non-resident lease holder).

I'd be asking the council as to what grounds they have made the liability decision

"I'd be asking the council as to what grounds they have made the liability decision" He stores his market junk there, spends all day in the house, uses the kitchen appliances, has the heating on etc but says he doesn't sleep there. The council apparently checked him out themselves before presenting him with the CT bill and said he was using it for business purposes. 

Well, council tax isn't due on business use for a start.

Simply using a building to store stuff doesn't make you liable for council tax - the legislation is not that straight forward. If a council simply made the decision on that basis then they need to re-learn their jobs (you'd be surprised how little training in council tax legislation that most council tax staff have - almost nil.).

HappyScotsman

RonsDaughter said:

CIS said:

RonsDaughter said:

My mother died October 2019 but my brother (who owns his own house that he pays council tax on) used her property to store items for his market stall business. The local council are charging him council tax for both his own home where he sleeps, and for my mothers house where he stores his goods. This is currently under review, but looks likely he will have to pay for both properties. Probate was granted in January and we have until June to sell the property etc, however, if the house remains unsold, will my mother's estate have to foot the council tax bill, or should my brother continue to pay as he will continue to use the house? The house also still contains my mother's belongings. 

This is an area where s6 of the LGFA 1992 needs to be considered.

Unless he is a resident of the property (which he is not) then liability rests in the hands of the non-resident owner. The non-resident owner is the party with the lowest legal interest that has been granted to them for a period of 6 months or more (i.e a 12 month tenancy is inferior to a 100yr lease, so a non-resident the tenant would be liable rather than the non-resident lease holder).

I'd be asking the council as to what grounds they have made the liability decision

"I'd be asking the council as to what grounds they have made the liability decision" He stores his market junk there, spends all day in the house, uses the kitchen appliances, has the heating on etc but says he doesn't sleep there. The council apparently checked him out themselves before presenting him with the CT bill and said he was using it for business purposes. 

And if there is any buildings or contents insurance, has probably invalidated it.

RonsDaughter

CIS said:

RonsDaughter said:

CIS said:

RonsDaughter said:

My mother died October 2019 but my brother (who owns his own house that he pays council tax on) used her property to store items for his market stall business. The local council are charging him council tax for both his own home where he sleeps, and for my mothers house where he stores his goods. This is currently under review, but looks likely he will have to pay for both properties. Probate was granted in January and we have until June to sell the property etc, however, if the house remains unsold, will my mother's estate have to foot the council tax bill, or should my brother continue to pay as he will continue to use the house? The house also still contains my mother's belongings. 

This is an area where s6 of the LGFA 1992 needs to be considered.

Unless he is a resident of the property (which he is not) then liability rests in the hands of the non-resident owner. The non-resident owner is the party with the lowest legal interest that has been granted to them for a period of 6 months or more (i.e a 12 month tenancy is inferior to a 100yr lease, so a non-resident the tenant would be liable rather than the non-resident lease holder).

I'd be asking the council as to what grounds they have made the liability decision

"I'd be asking the council as to what grounds they have made the liability decision" He stores his market junk there, spends all day in the house, uses the kitchen appliances, has the heating on etc but says he doesn't sleep there. The council apparently checked him out themselves before presenting him with the CT bill and said he was using it for business purposes. 

Well, council tax isn't due on business use for a start.

Simply using a building to store stuff doesn't make you liable for council tax - the legislation is not that straight forward. If a council simply made the decision on that basis then they need to re-learn their jobs (you'd be surprised how little training in council tax legislation that most council tax staff have - almost nil.).

I think there is more to it than that, probably the amount of time he spends there has something to do with it. One of the neighbours told me he tells everyone he has moved out but everyone knows he hasn't. I know he was sleeping there at least a few nights per week...

RonsDaughter

HappyScotsman said:

RonsDaughter said:

CIS said:

RonsDaughter said:

My mother died October 2019 but my brother (who owns his own house that he pays council tax on) used her property to store items for his market stall business. The local council are charging him council tax for both his own home where he sleeps, and for my mothers house where he stores his goods. This is currently under review, but looks likely he will have to pay for both properties. Probate was granted in January and we have until June to sell the property etc, however, if the house remains unsold, will my mother's estate have to foot the council tax bill, or should my brother continue to pay as he will continue to use the house? The house also still contains my mother's belongings. 

This is an area where s6 of the LGFA 1992 needs to be considered.

Unless he is a resident of the property (which he is not) then liability rests in the hands of the non-resident owner. The non-resident owner is the party with the lowest legal interest that has been granted to them for a period of 6 months or more (i.e a 12 month tenancy is inferior to a 100yr lease, so a non-resident the tenant would be liable rather than the non-resident lease holder).

I'd be asking the council as to what grounds they have made the liability decision

"I'd be asking the council as to what grounds they have made the liability decision" He stores his market junk there, spends all day in the house, uses the kitchen appliances, has the heating on etc but says he doesn't sleep there. The council apparently checked him out themselves before presenting him with the CT bill and said he was using it for business purposes. 

And if there is any buildings or contents insurance, has probably invalidated it.

Solicitor sorted that one out thankfully!

RonsDaughter

So everyone, thanks so much for your insights and comments. It has been an absolute worry but you all definitely made my day better  
It has just been confirmed by the probate solicitor that my brother will still be liable for the Council Tax. They have been in touch with the council office and it has been clarified. I didn't ask them to explain it to me though (at £150 per hour) and left it at that. 
Onto the next battle......

xxx

p00hsticks

naedanger said:

p00hsticks said:

Mrs_pbradley936 said:

I don't know if my case was unusual but we had to get a valuation done by one of these RICS: Royal Institution of Chartered Surveyors we were told you can't use any old Estate agent for probate purposes.

I'm currently at this stage and my understanding is that it depends on the value of the estate and whether IHT is possibly going to be due. If the gross value of the estate is estimated to be under £250k, then HMRC will accept approximations of values - so estate agent valuations are acceptable. But if your initial estimate of the estate is over £250k, then you need to then get proper valuations of the more expensive items such as property before you submit the assessment to HMRC that is required prior to being able to apply for probate.

 Also there was no Council Tax due because the house was unoccupied.

There's a council tax exemption until probate is obtained (which the OP says they got in Jaunuary). After that I believe there is a possibility of getting a further six months exemption but I think it may depend on the property being not only unoccupied but unfurnished, and it sounds as if the OP / brother haven't actually cleared the proerty of possesions & furniture as yet.

I don't think there can be a rule based on £250k since I have recently been executor for an estate worth significantly more than that where I just went with my own estimate for the property's value and it was not queried by HMRC. 

However the estate was comfortably below the level at which IHT would be payable after allowing for all allowances. Had the estate been liable for IHT (or near the IHT threshold) I would have gone for a RICS valuation. 

Well, assuming we are talking about England, I've been following the guidance on the gov.uk website

https://www.gov.uk/valuing-estate-of-someone-who-died/tell-hmrc-estate-value

which says....

When telling HMRC about Inheritance Tax, you’ll usually need more accurate valuations of the estate. This includes using a professional valuer for things over £1,500.

You can continue using estimates if one of the following applies:

• the estate’s gross value is less than £250,000
• all the estate passes to the dead person’s spouse or civil partner, a charity or organisations like museums or community amateur sports clubs

I'm currently awaiting a couple of estate agents to come and give valuations, and are hoping that this will mean that the gross value is under £250k. If over that, I guess it depends on whether you consider an estate agent as a 'professional valuer'  

CIS

RonsDaughter said:

I think there is more to it than that, probably the amount of time he spends there has something to do with it. One of the neighbours told me he tells everyone he has moved out but everyone knows he hasn't. I know he was sleeping there at least a few nights per week...

That still doesn't make him resident if he already has a home elsewhere. Where a person is not resident then their chance of actually being liable for the council tax is far lower.

The problem (and I deal with council tax disputes, appeals etc as my job) is that there is no time limit on amending the liability so, if wrong, backdated bills can be flying off to the correct parties 2 or 3 years down the line. From what you have described information wise it sounds iffy.

The key point to keep in mind is that just because they say it is right doesn't mean it is or won't be amended further down the line.

CIS

It has just been confirmed by the probate solicitor that my brother will still be liable for the Council Tax. They have been in touch with the council office and it has been clarified. I didn't ask them to explain it to me though (at £150 per hour) and left it at that.

Ouch - that's about 3x my fees and I specialise in council tax.

Chances are the probate solicitor won't particularly understand it either - few do as it can be a very strange area of law.

naedanger

p00hsticks said:

naedanger said:

p00hsticks said:

Mrs_pbradley936 said:

I don't know if my case was unusual but we had to get a valuation done by one of these RICS: Royal Institution of Chartered Surveyors we were told you can't use any old Estate agent for probate purposes.

I'm currently at this stage and my understanding is that it depends on the value of the estate and whether IHT is possibly going to be due. If the gross value of the estate is estimated to be under £250k, then HMRC will accept approximations of values - so estate agent valuations are acceptable. But if your initial estimate of the estate is over £250k, then you need to then get proper valuations of the more expensive items such as property before you submit the assessment to HMRC that is required prior to being able to apply for probate.

 Also there was no Council Tax due because the house was unoccupied.

There's a council tax exemption until probate is obtained (which the OP says they got in Jaunuary). After that I believe there is a possibility of getting a further six months exemption but I think it may depend on the property being not only unoccupied but unfurnished, and it sounds as if the OP / brother haven't actually cleared the proerty of possesions & furniture as yet.

I don't think there can be a rule based on £250k since I have recently been executor for an estate worth significantly more than that where I just went with my own estimate for the property's value and it was not queried by HMRC. 

However the estate was comfortably below the level at which IHT would be payable after allowing for all allowances. Had the estate been liable for IHT (or near the IHT threshold) I would have gone for a RICS valuation. 

Well, assuming we are talking about England, I've been following the guidance on the gov.uk website

https://www.gov.uk/valuing-estate-of-someone-who-died/tell-hmrc-estate-value

which says....

When telling HMRC about Inheritance Tax, you’ll usually need more accurate valuations of the estate. This includes using a professional valuer for things over £1,500.

You can continue using estimates if one of the following applies:

• the estate’s gross value is less than £250,000
• all the estate passes to the dead person’s spouse or civil partner, a charity or organisations like museums or community amateur sports clubs

I'm currently awaiting a couple of estate agents to come and give valuations, and are hoping that this will mean that the gross value is under £250k. If over that, I guess it depends on whether you consider an estate agent as a 'professional valuer'  

Actually it was a Scottish estate I was dealing with. Nevertheless I can't really imagine HMRC  is going to demand an expensive valuation for a house if it is clear that even on a very generous valuation the property will not take the estate over the IHT threshold. I would also be a bit surprised if they are less flexible when dealing with English estates than they are when dealing with Scottish ones, but maybe they are.

Shelldean

Ronsdaughter.

I presume he's paying for the services he does use? Like electric or does he also expect the estate to bear the cost?

Are the bill still in your mother's name or his?