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Wills and Class F exemption from Council Tax

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  • Wills and Class F exemption from Council Tax

    My father died leaving a Will in which his estate was given to 2 executors in trust who, after the payment of any debts, would then distribute the residue of the estate to his children. There was no specific mention of my father's property in his Will (of which he was the sole owner) and certainly it was not specifically bequeathed. Noone has lived in the property since my father died.

    The Council are claiming that the children have a "material interest" in my father's property and are therefore liable to Council tax. I am arguing that the children have no rights whatsoever over the property but only the right to receive a share of the residue of my father's estate. The 2 executors have legal ownership over the estate while its being administered and I am claiming as one of the executors that no Council tax is payable until 6 months after the grant of probate in accordance with the class F exemption.

    I have seen class F exemptions come up as a subject in other threads but they have usually involved some other factor such as one of the beneficiaries being a joint owner or in the case of a sole beneficiary where the Council could argue that the beneficiary is the owner as there are no "competing" claims. I don't believe that's true where there is more than one beneficiary as none of them can claim to be an "owner" of the property or have any specific rights in relation to it. They only have a right to a share of the net proceeds from the estate. At least that's my view.

    I have done some legal research on this case and have assessed case law such as Dr Barnardo's Homes v Commissioners of the income taxes (1921) which was followed in Commissioners of Stamp Duties v Livingston (1965), Eastbourne Mutual Building Society v Hastings Corporation (1965) Re leigh's Trust (1970) Marshall v Kerr (1995) and these legal authorities all seem to confirm that, in the case of a residual estate, the beneficiaries under a Will have no legal or equitable interest in any property comprised in the estate while the executors are administering the estate. The proprietary rights are instead vested in the legal personal representatives. I have also reviewed Valuation Tribunal decisions given to me by the Council but they do not cover these circumstances.

    The Council still claims that the beneficiaries under a Will have a material interest in the property and therefore Council tax is payable.

    I would be grateful to know if others have had this response from Councils regarding class F. Thanks
    Tags: None

  • #2
    Hi and welcome

    The Council Tax (Exempt Dwellings)Order 1992 doesn't mention those who might have a material interest in the property.
    The following councils seem to agree with you:
    Northamptom ( https://www.northampton.gov.uk/info/...-exemptions/12)
    Greenwich (https://www.royalgreenwich.gov.uk/in...upant_has_died)
    Harrow (http://www.harrow.gov.uk/info/200173...death_of_owner)

    Further the Local Government Finance Act 1992 Section 6 (2) states the person liable for the tax is the owner and Section 6(5) defines "owner‟as one who has a "material interest in the whole or any part of the dwelling".
    Section 6(6) defines "material interest‟ as a freehold interest or a leasehold interest which was granted for a term of six months or more.

    As the children have neither a freehold nor leasehold interest, they do not have a "material interest"

    At least that's my reading.
    Perhaps Crazy council has further thoughts

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