Council Tax after death
Working out council tax when someone dies
Council tax is just one of several taxes executors may have to deal with when administering a deceased person’s estate.
The responsibility to pay council tax doesn’t end when the person liable for the tax dies.
Nobody wants to pay more council tax than is absolutely necessary. Executors have a duty to minimise the impact of tax on the deceased’s estate. So they should make sure that any exemptions and reliefs from tax are claimed.
But working out exactly which exemptions apply and when, can be a bit of a headache.
The six month council tax ‘rule’
Local councils have a discretion to exempt properties from council tax that are unoccupied and ‘substantially empty’.
When someone dies, the local authority usually exempts their property from council tax for six months if the property is going to be sold.
When does the exempt period start?
Confusion can arise about when the six month exempt period starts.This is because local authorities have the power to make their own rules about exemption from council tax. Slightly different policies have been adopted throughout the country.
In many areas, councils decide the exempt six month period starts when a grant of probate is issued by the Probate Registry. Some councils decide the six month period runs from the date of death.
Many councils will also allow the property to be exempt during the period between the date of death and the date when the grant is issued if they know that a grant of probate is being applied for. This means the exempt period could be longer than six months.
When the initial six month exempt period has expired it may also be possible to ask for the exemption to be extended. This will depend on whether the property is furnished or not. If the property is unfurnished it may be possible to get the exempt period extended further.
But if the property remains furnished after the end of the six month exempt period, the executors will usually have to pay the council tax until they can either sell the property or transfer it to the beneficiaries.
Sole occupier discount
Where two adults have been occupying a property and one of them dies responsibility for payment passes to the remaining occupant. A sole occupier discount is generally allowed of 25%.
If you’re in that situation it’s a good idea to contact the council as soon as possible to avoid paying more than is necessary. You’ll need to produce a copy of the death certificate.
Second homes and holiday homes
If the deceased owned a second home or holiday home they may have been claiming a council tax discount of up to 50% if the property was furnished. Not all local authorities allow a second home discount so it’s important executors check with the local authority concerned.
Where a tenant dies, most councils will allow the property to be exempt from council tax from the date of death until at least the date when the tenancy ends.
It’s important to check the tenancy agreement regarding ending of the tenancy. Until the tenancy is formally brought to an end the executors will be liable for the rent.
So, if you’re in that position it’s wise to discuss payment of the rent with the landlord and notify the local authority of the tenant’s death as soon as possible.
What should you tell the local authority?
You’ve probably gathered that it’s sensible to keep the local council informed of what is going to be happening with the deceased’s property but that doesn’t mean you are obliged to tell them everything.
Often councils ask to see a copy of the deceased’s will but you don’t have to show it to them if you would rather not. After all, there’s often information unrelated to the deceased’s property contained in the will and the beneficiaries might not thank you for disclosing information about them to the authorities.
The death certificate and subsequently the grant of probate should be sufficient information for the local authority to make it’s decision about whether the property is eligible for exemption.
Many councils also ask executors to pass on to them details of the new owner of the property once it has been sold or transferred to a beneficiary but there’s no statutory obligation on executors to do so and if you don’t have the permission of the new owner you should probably ignore that request.
Points to remember
- There isn’t a uniform exemption policy across all local authorities – so check
- executors are responsible for making sure the right amount of tax is paid
- think about getting furniture cleared at an early stage
- executors are only responsible for making payments from estate funds, not their own money
- don’t feel you have to send a copy of the deceased’s will to the council
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