Capital Taxation (Council Tax) Flashcards
What is the primary legislation governs Council Tax?
Local Government Finance Act (LGFA) 1992
Requires the Commissioners of Inland Revenue (now HMRC) to carry out valuations of dwellings in England and Wales for the purposes of compiling and maintaining valuation lists.
What part of LGFA 1992 defines a dwelling?
It is Section 3 of the LGFA 1992 that defines what a “dwelling” is for CT and reads as follows:
(2) Subject to the following provisions of this section, a dwelling is any property which -
a) by virtue of the definition of hereditament in section 115(1) of the General Rate Act 1967, would have been a hereditament for the purposes of that Act if that Act remained in force; and
b) is not for the time being shown or required to be shown in a local or a central non-domestic rating list in force at that time; and
c) is not for the time being exempt from local non-domestic rating for the purposes of Part III of the Local Government Finance 1988 Act (“the 1988 Act”); and in applying paragraphs (b) and (c) above no account shall be taken of any rules as to Crown exemption.
Where will you find the 9 assumptions for CT?
Reg 6(2) of The Council Tax (Situation and Valuation of Dwellings) Regulations 1992 (SI No. 550) as amended by the Council Tax (Situation and Valuation of Dwellings) (Amendment) Order 1994
What are the 9 assumptions?
(2) The assumptions are:
(a) that the sale was with vacant possession;
(b) that the interest sold was the freehold or, in the case of a flat, a lease for 99 years at a nominal rent;
(c) that the dwelling was sold free from any rent charge or other encumbrance;
(d) except in a case to which paragraph (3) or (3A) applies, that the size, layout and character of the dwelling, and the physical state of its locality, were the same as at the relevant date;
(e) that the dwelling was in a state of reasonable repair;
(f) in the case of a dwelling, the owner or occupier of which is entitled to use common parts, that those parts were in a like state of repair and the purchaser would be liable to contribute towards the cost of keeping them in such a state;
(g) in the case of a dwelling which contains fixtures to which this sub-paragraph applies, that the fixtures were not included in the dwelling;*
(h) that the use of the dwelling would be permanently restricted to use as a private dwelling; and
(i) that the dwelling had no development value other than value attributable to permitted development.
*Reg 6(2)(g) only applies to fixtures which are designed to make a dwelling suitable for use by a disabled person and which add to the dwelling’s value - this is covered in Reg 6(4)
Explain Wilson v Coll
A landlord argued that a hereditament did not exist because it made no economic sense for him to do so. The Judgement confirmed that whether a repair was economic or not was not a relevant consideration in council tax, as it was in Non-Domestic Rating. If a vacant property was capable of normal repair, without major reconstruction or character changing work, then it would still qualify as a hereditament and thus a dwelling. It was also emphasized that the initial hereditament question is entirely separate from the subsequent repair assumption with regard to reasonable repair of a dwelling. Only if a hereditament exists, can the repair assumption be invoked, and the two ‘repair’ issues should not be confused.
Where will you find the definition of a composite hereditament?
S.64(9) of the Local Government Finance Act 1988
“A hereditament is composite if part only of it consists of domestic property”
What part of The Council Tax (Situation and Valuation of Dwellings) Regulations 1992 refers to composite properties?
Regulation 7(1) states,
“In the case of a dwelling which is a composite hereditament or is part of a single property which is a composite hereditament, the value of the dwelling, for the purposes of valuations under Section 21 of the Act, shall be taken to be that portion of the relevant amount which can reasonably be attributed to domestic use of the dwelling”.
Explain Daniels LO v Monmouth School 2009
Concerned the identification of the composite hereditament to be apportioned. The East Wales VT had accepted a case that dwellings which were separate hereditaments and situated in various parts of Monmouth outside the main school boundaries were to be mathematically apportioned from a relevant amount comprising the ‘whole school valuation’, without reference to the curtilage of the specific composite hereditament in question. The High Court rejected such a basis, confirming that the valuation unit to be apportioned was the hereditament that had the domestic element and it was wholly incorrect to include any other property.
Where will you find the valuation date for England?
Reg 6(1) of The Council Tax (Situation and Valuation of Dwellings) Regulations 1992
The value of any dwelling shall be taken to be the amount which, subject to certain assumptions, the dwelling might reasonably have been expected to realise if it had been sold in the open market by a willing vendor on 1st April 1991.
What is article 2 of the Council Tax (Chargeable Dwellings Order) 1992
Defines self-containment.
Self contained unit” means—
(a)
a building or part of a building;
(b)
a caravan; or
(c)
a boat, which has been constructed or adapted for use as separate living accommodation.
What is article 3 of The Council Tax (Chargeable Dwellings) order 1992?
- Where a single property contains more than one self contained unit, for the purposes of Part I of the Act, the property shall be treated as comprising as many dwellings as there are such units included in it and each such unit shall be treated as a dwelling.
What is article 4 of The Council Tax (Chargeable Dwellings) Order 1992?
This gives the Listing Officer discretion to aggregate properties containing more than one self-contained unit.
What are the circumstances in which the Council Tax list can be altered?
- New dwelling
- Deletion
- Inaccuracy in the list
- Becomes or ceases to be a composite dwelling
- Inaccuracy other than above which requires correction
- Material reduction
- Material increase
- Increase/reduction of the domestic use of a dwelling
- Correction of errors
- By order of VT, VTE or High Court
What Act provides the duty of the Listing Officer for CT?
s.22(1) and s.27(7) of LGFA 1992.
Duty to maintain a fair and accurate CT list.
What regulation detail the assumptions, AVD and actual valuation of property for CT purposes?
Statutory Instrument 1992/550 The Council Tax (Situation and Valuation of Dwellings) Regulations 1992
Where do you find the basis for valuations and assumptions?
Reg 6(1), (2) and (3) of the CT (Situation and Valuation of Dwellings) Regulations 1992.
How many assumptions are there for CT?
9
What is the leading case that deals with repair where no scheme of redevelopment?
Wilson v Coll
What is the main case that changes VOA approach to a property undergoing a scheme of redevelopment?
Newbigin (VO) v Monk [2017] UKSC 14
Does the concept of tone of the list apply to CT?
Yes
Where do you find directions relating to annexes and other self contained units?
Article 3 of the Council Tax (Chargeable Dwelling) Order 1992 SI 549
Where can you find the definition of domestic property?
Section 66 LGFA 1992
In England what value range covers band F?
£120,001 to £160,000
How long after a proposal decision notice has been issued do appellants have to make an appeal to the VT?
4 months
What is the effective date for a change in the balance of a composite?
Day of event
What is the effective date for the addition or deletion of a composite indicator?
Day of event
Which regulation do you value Composite Hereditaments under?
Reg 7 of the CT (Situation and Valuation of Dwellings) regulation 1992
What regulations tells us how we compile, maintain, alter the CT list and give appeal rights in England?
Statutory Instrument 2005/181 The Council Tax (Alteration of Lists and Appeals) (Amendments) (England) Regulations 2009
What are the rules for self-catering and holiday let accommodation pre 1st April 2023 for England and Wales?
England:
Has to be available to let for 140 nights (note doesn’t actually have to be let)
Wales:
Available to let for 140 nights and;
Actually let for 70 nights per year
What are the rules for self catering holiday let accommodation in England and Wales as of 1st April 2023?
England:
Available to let for 140 nights a year and;
Actually let for 70 nights in the last 12 months
Wales:
Available to let for 252 nights in total over the current and previous tax years and;
Actually let for at least 182 nights in the last 12 months
A property In England that has been a holiday let since 2010 undergoes refurbishment in April 2022 and does not reopen until 1st January 2023 where it is advertised and let out for 90 days up to the end of March 2023. Should this be listed in NDR as a holiday let?
Under pre 1st April 2023 rules:
This has not been available to let for 140 nights and so must be shown in the CT list.
Under new rules as of 1st April 2023:
Whilst this meets the rules for 70 nights actually let in the previous 12 months, it still has not met the 140 nights of being available. It must satisfy all rules meaning that at minimum it would have to be advertised for another 50 days before being a holiday let.
What is the effective date for the new HMO rules?
1st December 2023
What are the new rules for HMOs?
From 1st December 2023 and licensed HMO’s covered by section 254 of the Housing Act 2004 are to be aggregated to one band.
Note that the new rules do not cover those covered by section 257
