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IHTM28192 - Investigating Liabilities:
Council Tax
The Local Government Finance Act 1992 introduced the council tax
for chargeable dwellingswith effect from 1 April 1993. There was no
change to non-domestic rates. Council tax is a tax
on dwellings ratherthan on people. It is based on the capital
value of the relevant building as at
1 April 1991.
Unlike the community charge, there will be only one Council Tax
bill for each dwelling. The
persons liable for the bill are set out below, in descending
order. A non-resident owner is theperson of last resort.
a resident freeholder/resident owner (Scotland) a resident
leaseholder (including an assured tenant under the Housing Act
1988)/resident
tenant (Scotland) a resident statutory or secure tenant (England
and Scotland) a resident licensee/sub-tenant (Scotland) a resident
the owner.
The owner will be also be liable when there are no residents and
when the dwelling falls into one
of the prescribed classes of chargeable dwellings detailed for
the purposes of S8(1) of the Act by
the Council Tax (Liability for Owners) Regulations 1992
(England). Details of these classes canbe found on the Internet at
http://www.legislation.gov.uk/uksi/1992/551/regulation/2/made
The full council tax bill assumes that there are two adults
living in a dwelling. It will be reducedby
25%, if only one adult lives in a dwelling as their main home,
and 50% if the dwelling is no-one's main home. This may include
empty dwellings and
second homes.
Certain categories of unoccupied dwelling are wholly exempt. For
example, property which
forms part of the estate of a deceased person will be wholly
exempt for up to six months from the
date of the grant of probate. After this the administrator or
executor will be liable.
In addition, certain categories of adults are disregarded for
the purposes of the Council Tax.These include students, people
lacking capacity under the Mental Capacity Act 2005, andmembers of
religious communities (residences of ministers of religion are
exempt).
Regulations provided by the Council Tax (Administration and
Enforcement) Regulations 1992
provide for the payment by the executors or administrators of
any outstanding liability and for
the refund to them of any overpayment that may have been
made.
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Normally, the assessment for the general rate or Council Tax in
respect of a property is for the
whole of the financial year. But where an occupier or owner
stops occupying or owning the
property before the end of that period, they may recover any
amount overpaid from the rating orbilling authority.
In practice, difficulties can arise for many reasons. One
deceased will have paid the full rate intheir lifetime, whilst
others will be in arrears or paying by instalments. Personal
representatives
are unlikely, in practice, to get refunds of Council Tax or
Rates paid for the whole of the period
from the date of death or to avoid entirely the payment of any
charges that are unpaid at the dateof death.
Council Tax does not apply to property in Northern Ireland.
These are still subject to rates.
