Liferent Trust (Scotland) and Council Tax exemption

jem16

My mother’s half of the house was placed inside a Liferent Trust with my brother and I as trustees back in March when she died. Dad continued to live in the house but has recently passed away.

As the house is unoccupied for now and will eventually be sold once Confirmation is gained, I was looking at the situation with regards to Council Tax.

I’m aware that it is possible to apply for Council Tax exemption but I’m trying to find out if the presence of this Liferent Trust means that we cannot do so? I asked the lawyer who dealt with Mum’s estate and she said she had never come across a situation where we couldn’t get an exemption even with this Trust in place but searching the internet seems to suggest we cannot.

Has anyone dealt with this before or knows exactly what our rights are?

kazwookie

Sorry for your loss.

Have you rung the local council, and asked them?

jem16

kazwookie said:

Sorry for your loss.

Have you rung the local council, and asked them?

Thanks. No I haven’t rung the council as I’d imagine their answer would be no exemption due. I’d like to get more information so I know my rights on it first. 

SiliconChip

jem16 said:

kazwookie said:

Sorry for your loss.

Have you rung the local council, and asked them?

Thanks. No I haven’t rung the council as I’d imagine their answer would be no exemption due. I’d like to get more information so I know my rights on it first. 

Why do you think they'd tell you something that's not correct? That would leave them open to a complaint if you then found they'd lied. I'd ask them, and if they tell you that you can't have the exemption only then do some more checking - if they tell you that you can have it then you're sorted.

Keep_pedalling

The trust does not impact CT exemption.

jem16

SiliconChip said:

jem16 said:

kazwookie said:

Sorry for your loss.

Have you rung the local council, and asked them?

Thanks. No I haven’t rung the council as I’d imagine their answer would be no exemption due. I’d like to get more information so I know my rights on it first. 

Why do you think they'd tell you something that's not correct? That would leave them open to a complaint if you then found they'd lied. I'd ask them, and if they tell you that you can't have the exemption only then do some more checking - if they tell you that you can have it then you're sorted.

Well hopefully they wouldn’t tell me something that’s incorrect but it’s not beyond the realms of possibility for someone to give you a wrong answer. 

jem16

Keep_pedalling said:

The trust does not impact CT exemption.

The Council website mentions trusts as a reason for no exemption. That’s why I’m asking. 

The whole property isn’t held in trust and Dad paid the Council Tax himself. 

Keep_pedalling

Doesn’t this sort of trust end on the death of the surviving spouse? 

jem16

Keep_pedalling said:

Doesn’t this sort of trust end on the death of the surviving spouse? 

Ah yes I believe you are correct in that. So in that case there is no longer any trust and the estate has sole liability so I can apply for the exemption. 

buddy9

I cannot see that the estate has sole liability.

The Council Tax (Exempt Dwellings) (Scotland) Order 1997 contains criteria for exemption from council tax. Article 3 references schedule 1 as containing a list of dwellings that are considered Exempt dwellings. Paragraph 6 of schedule 1 of the Order applies to situations where council tax liability would fall to be met solely out of the estate of a deceased person and either………….

In your case it could be argued that the dwelling is not exempt because it does not sit solely with the executor if half vests in the executor and half vests in the liferent trustees.

jem16

buddy9 said:

I cannot see that the estate has sole liability.

The Council Tax (Exempt Dwellings) (Scotland) Order 1997 contains criteria for exemption from council tax. Article 3 references schedule 1 as containing a list of dwellings that are considered Exempt dwellings. Paragraph 6 of schedule 1 of the Order applies to situations where council tax liability would fall to be met solely out of the estate of a deceased person and either………….

In your case it could be argued that the dwelling is not exempt because it does not sit solely with the executor if half vests in the executor and half vests in the liferent trustees.

I need to get my head round this Liferent Trust. 

On my mother’s death the Liferent Trust was created which left her half of the house to my brother and myself. Dad was able to remain in the house until his death with my brother and I as trustees of the other half. At least that’s my understanding. Is it correct?

On my father’s death the Liferent Trust ends. Does that then mean that my brother and I are now considered the legal owners of half of the house?