Council Tax on Second Home

Badgers22

My wife and I own and live in two properties - an inherited larger house in the country and a small flat in London.  The country house would have the greater value.  We sold our primary residence about 12 years ago shortly after we had inherited the country house, and paid no capital gains on the sale.  We used some of the proceeds to buy the flat.  We were advised by Solicitors to elect a primary residence and we decided that it was more likely that we would sell the flat first, so declared it as our primary residence to HMRC at that time.  They wrote back confirming receipt of our election.

I spend more time in the flat as I am still working but my wife comes back and forth.  We have been paying full Council tax on both properties.  Both Councils have indicated that Council Tax will be doubled from April 2025.  The Council Tax on the flat is considerably cheaper and my intention was to inform this Council at the beginning of 2025 that with effect from 1 April 2025, the flat will be my second home.  My reading of the relevant rules around capital gains is that HMRC accept that ones declaration of a primary residence for relief purposes need not be ones main residence.  (CG64485)  I do not believe that declaring a specific property as a second home for council tax purposes in any way invalidates our 2012 election.  The only thing that has changed  in our circumstances are the new rules around double council taxation.  What do others think?        

lincroft1710

As in many cases, where something is subject to 2 separate pieces of legislation there will be no correlation between the 2. So whatever was declared for CGT does not have to be the same for CT, also circumstances change. However the council(s) may not agree with you as to which is your primary residence.

Badgers22

I can appreciate that they both would like the double tax!  I would argue that our country property on physical size alone is more a main residence than a studio flat.  Since lockdown I spend 250 days a year in the country WFH. So I feel I could support my argument.  We are in relatively new territory with how this question will play out across the country.

lincroft1710

Badgers22 said:

 Since lockdown I spend 250 days a year in the country WFH. 

Badgers22 said:

I spend more time in the flat as I am still working but my wife comes back and forth.  

Well which is it?

Badgers22

I spend more time than my wife in the flat I should have said.  Between 2012 and 2020 I was in the flat most working days and went to the country property at weekends.  Lockdown completely changed that balance and for the last four years I have spent substantially less time in London.  My wife spends about 30 days a year in London and that hasn't changed much since 2012.  However as couples are treated as one, I guess she is stuck with my arrangements!    

lincroft1710

Ignore what happened pre 2024.

Based what you now say I agree the country house is your main residence.

Badgers22

Glad you agree!  My preference is to take the initiative and let the London Council know before the annual bills hit the mats.