Council tax

[gary29]

Thankyou Flemming and Plym77 for your replies. It is comforting to know of such expertise on this forum. The council tax I had to pay for 2005-2006 on the empty flat. was charged to me on the basis, that I had already gained a 6 month exemption from the council prior. Due to the flat being neglected and left in a un-habitle condition by the outgoing tennant. wherabouts unknown.

The flat had been left with broken fittings, damaged walls, smashed Internal doors. Ripped wall paper. general grotiness, quite a state. Because of the condition there was no way I could re-let at the time. During the period of the exemption I was not able to complete repairs in time. Then last year from May onwards. A person expressed an interest in purchasing the lease. He was prepared to take the flat on with its faults, provided my sale price reflected the damage.

I agreed a price with Him. then another 6months went by, while I waited for his attention to exchange contracts. All the while the flat remained in an un-inhabitle condition.

As I was now paying council tax as my exemption had expired. I was feeling caught between a rock and a hard place. Did I hold out in the vain hope my lease buyer would come through. Or did I bite the bullit and re-commence rectifying the damage. I chose the latter. As of the 1st of July this year, the flat has been re-let.

I have paid 14 months of full council tax payments up to the 30th of June 2006. I did not even qualify for a discount. as Nottingham city council has the power to impose its own juristiction over revenue raising. A parliamentary act endorsed by Two Jag Prescott I believe. Which on tha face of it, is unfair, as I am aware other local authorities do apply reductions on empty, unfurnished, un-occupied lets.

I am presently completing my 2005-2006 tax return and am still unsure wether I can claim an allowance for the council tax for the 05-06 tax year. Even though since 2000 the flat was continuley let and I have never taken up residence in that time.

regards

Gary29

[plym77]

Hi Gary

I am afraid the answer is not clear cut.

The question of whether you can claim the council tax (plus mortgage interest and other related expenses of course) depends on whether your rental business has ceased at any point in the period. This is an important question as not only could it impact of whether you can claim the expenses, but also whether any losses brought forward relating to the property may be lost.

Had you have put the property on the market to sell it (so advertised etc etc) you may have a difficult battle on your hands, however, as I understand it in your case you had no intention of selling, you were merely redecorating the property with the intention of re-letting, and you were approached for a sale.

In this case, it may be possible to argue that the letting business had not ceased and as such I would seek to claim the expenses incurred in the last 18 months against the rental income you are now receiving. Don't forget, it is not just the council tax, but any utilities, mortgage interest, repairs (which are not Capital Improvements) etc.

You should note that whilst this is the approach you may wish to take, it is not a definitive answer, and if queried by the Inland Revenue, you may have to argue your case.

I should point out that I can only provide a general answer based on the information you have provided. Should require any assistance with the preparation of your self-assessment tax return or specific property tax advice, please do email me and I would be happy to provide you with a competative fee quote for my services. sherena.glanton@horwath.co.uk

I hope the above information is useful.

Regards

Sherena (Plym 77)