Why no Class F exemption for council tax?

bicyclist

After mum passed, I informed the council and they said there would be a 6-month grace period during probate (which I've just applied for). Yesterday (4 weeks later) I received an email from them asking for the name/address of the executors for future correspondence. I gave mine and my sisters name, and mum's home address as our correspondence address (it seemed simplest as at least one of us would be here one or two days a week as we clear the place). Today I received another email with a council tax bill for nearly £3,500. This included 'Premium (100%) Second Homes'.

I have emailed back to ask why as this is very concerning! One possible fly in the ointment is that myself and my sister were named as co-owners of the property when mum made her will 10 years ago (I did not know about this). Would this be relevant?

jem16

Yes it’s very relevant. The Council Tax exemption only applies to properties where the deceased was the sole owner.

bicyclist

jem16 said:

Yes it’s very relevant. The Council Tax exemption only applies to properties where the deceased was the sole owner.

Oh boy! I assume if the house is sold before all the installments have fallen due we'd then not be liable for any left over?

poppystar

One other potential issue here is how the property was put in your names. Was half of it left to the two of you on death of your father with mother having a right to live there? If not and it was effectively gifted absolutely to the two of you then I believe you will also be liable for CGT on the increase in value from that date. 

bicyclist

poppystar said:

One other potential issue here is how the property was put in your names. Was half of it left to the two of you on death of your father with mother having a right to live there? If not and it was effectively gifted absolutely to the two of you then I believe you will also be liable for CGT on the increase in value from that date. 

I'm not sure of the wording - just that we are on the deeds as two of the three named owners from that date. We realized the CGT thing a week or so ago! I /believe/ we're therefore only liable for 2/3 CGT - but that's something to worry about down the line.

Keep_pedalling

bicyclist said:

poppystar said:

One other potential issue here is how the property was put in your names. Was half of it left to the two of you on death of your father with mother having a right to live there? If not and it was effectively gifted absolutely to the two of you then I believe you will also be liable for CGT on the increase in value from that date. 

I'm not sure of the wording - just that we are on the deeds as two of the three named owners from that date. We realized the CGT thing a week or so ago! I /believe/ we're therefore only liable for 2/3 CGT - but that's something to worry about down the line.

You will each have your own CGT liability based on the gain in value of your one third share. This will need to be paid within 60 days of the house sale. You should also note that for IHT purposes the whole house forms part of her estate as she continues to live there alone after giving away 2/3 of it. 

bicyclist

Keep_pedalling said:

bicyclist said:

poppystar said:

One other potential issue here is how the property was put in your names. Was half of it left to the two of you on death of your father with mother having a right to live there? If not and it was effectively gifted absolutely to the two of you then I believe you will also be liable for CGT on the increase in value from that date. 

I'm not sure of the wording - just that we are on the deeds as two of the three named owners from that date. We realized the CGT thing a week or so ago! I /believe/ we're therefore only liable for 2/3 CGT - but that's something to worry about down the line.

You will each have your own CGT liability based on the gain in value of your one third share. This will need to be paid within 60 days of the house sale. You should also note that for IHT purposes the whole house forms part of her estate as she continues to live there alone after giving away 2/3 of it. 

Yes, we assumed all along the house as a whole would be taken into consideration for IHT.

jem16

bicyclist said:

jem16 said:

Yes it’s very relevant. The Council Tax exemption only applies to properties where the deceased was the sole owner.

Oh boy! I assume if the house is sold before all the installments have fallen due we'd then not be liable for any left over?

Best check with the council. 

bicyclist

Just a passing thought… the fact I currently do not own any property has no bearing on my liability for the council tax for this (as judged) ‘second home’? My home (owned or not) being the place I usually reside/am on the electoral register for ?

MyRealNameToo

bicyclist said:

Just a passing thought… the fact I currently do not own any property has no bearing on my liability for the council tax for this (as judged) ‘second home’? My home (owned or not) being the place I usually reside/am on the electoral register for ?

No, you could rent two homes and still would have to pay the enhanced rate

bicyclist

MyRealNameToo said:

bicyclist said:

Just a passing thought… the fact I currently do not own any property has no bearing on my liability for the council tax for this (as judged) ‘second home’? My home (owned or not) being the place I usually reside/am on the electoral register for ?

No, you could rent two homes and still would have to pay the enhanced rate

Thought as much! Thanks.