Students and Council Tax - something I didn't know

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    Students and Council Tax - something I didn't know

    Here's a link.
    http://www.brlets.co.uk/blog/landlor...odic-tenancies

    Short version, if you let to students on a periodic tenancy (or for less than six months), the landlord is liable to pay the council tax (the student exemption doesn't apply).
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

    #2
    Good heads up jpkeates - Thanks

    Comment


      #3
      In my experience (student ten years ago and nephew at university now) student lets tend to be for one year and neither me nor my nephew has seen anyone offer a periodic tenancy to students, so they must be quite rare and it is more usual for the LL to offer a new tenancy rather than go through the due diligence all over again, or letting the AST slide into a periodic one by default (different uni's in 2 different cities). Just sayin'
      Last edited by Cuddly Cow; 13-02-2018, 12:44 PM. Reason: add more

      Comment


        #4
        I think it's a risk with any periodic tenancy under 6 months, isn't it?

        Comment


          #5
          I think it's a risk with any periodic tenancy under 6 months, isn't it?
          To some extent yes, depending on the circumstances.

          That link is not entirely correct regarding the position of students as it misses several key points - I suspect it's not from someone who had dealt with council tax legislation in depth.

          The non-resident owner remains liable for the council tax on a property only for which there is no resident (as per s6 of the LGFA 1992) - the non-resident owner will be the property owner is most cases although anyone with a tenancy of 6 months or more can fall to be the non-resident owner. This has always been the case for council tax purposes as that part of the legislation has never changed (it is also part of the issue which falls under Leeds v Broadley regarding tenancies and vacation).

          If the students are resident in the property then they fall liable for the council tax charge for that period irrespective of the term length of any tenancy agreement - s6 of the LGFA 1992 in respect of residents has no requirement for any legal agreement to be in place and it should be remembered council tax is a 'daily charge'.

          What they are also missing is that the Class N exemption is specifically written to cover these cases for students under most circumstances - it can apply regardless of whoever is liable, owner or occupier, it should be remembered that the exemption applies to the dwelling not the individual.

          A property occupied only by disregarded students as term-time accommodation' is eligible for a class N to be applied, the same applies where it occupied by residents who are also all students. Occupied means a property in which someone 'lives', this is a different concept under council tax legislation to 'resident' which is someone's 'sole or main residence'.

          [Class N: (1) A dwelling which is either--
          (a) occupied by one or more residents all of whom are relevant persons;
          (b) occupied only by one or more relevant persons as term time accommodation;
          (2) for the purposes of paragraph (1)--
          [(a) "relevant person" means--
          (i) a student;
          (ii) a student's spouse[, civil partner] or dependant being in [each] case a person who is not a British citizen and who is prevented, by the terms of his leave to enter or remain in the United Kingdom, from taking paid employment or from claiming benefits; or
          (iii) a person to whom Class C (school and college leavers) of regulation 3(1) of the Council Tax (Additional Provision for Discount Disregards) Regulations 1992 applies;]
          (b) a dwelling is to be regarded as occupied by a relevant person as term time accommodation during any vacation in which he--
          (i) holds a freehold or leasehold interest in or licence to occupy the whole or any part of the dwelling; and
          (ii) has previously used or intends to use the dwelling as term time accommodation;]

          I would say that in a decade of working in council tax it was very rare to see a student (or anyone else) with a tenancy agreement of less than 6 months fixed term unless you're looking at occupancy of a HMO (which is a different issue).
          Previously served 10 years as a council tax advisor with a local authority but now self-employed with my own council tax consultancy.

          If your local authority disagrees with any aspects of your council tax claim, as they are free to do so, a Valuation Tribunal appeal may be required.

          Comment


            #6
            interesting. My student child would find it convenient to be on a periodic tenancy when the current AST ends - but the way I read this the property would still be exempt. Sounds like an excuse for the agent to get fees for a new AST.

            Comment


              #7
              buzzard1994,

              Providing they are resident in the property (or using it as term time accommodation) and they remain a full time student then any exemption still applies and the tenancy makes no particular difference to that.
              Previously served 10 years as a council tax advisor with a local authority but now self-employed with my own council tax consultancy.

              If your local authority disagrees with any aspects of your council tax claim, as they are free to do so, a Valuation Tribunal appeal may be required.

              Comment


                #8
                ss002d6252,

                So, if I've understood correctly, what you're saying is that the reason I didn't know about the issue is because the article is wrong, so there is no issue?
                When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                Comment


                  #9
                  jpkeates,

                  More that there seems to have been a misunderstanding in how the legislation applies and it's confused the article (Although their confusion may well have come from dealing with a local authority... if they knew what they were doing all the time then I wouldn't have any clients).

                  A tenancy of less than 6 months can leave the landlord liable if the students are not regarded as being resident for council tax purposes (this uses the same logic as in Leeds v Broadley regarding the 'non-resident owner' definition) - if the students are resident then they are liable for those days (unless it's a CTax HMO and the landlord remain liable).

                  But non of the above cases prevents the Class N exemption applying, the Class N exemption requires only that the full time students are resident or living in it as term time accommodation. Unlike some exemptions there is no requirement for the students to be the liable parties for the Class N to apply (Which is my CTax HMO's can be exempt if full of students).

                  Any landlord who uses an AST with a 6 month or more term won't have any particular issues as the liability vests in the tenants and not the landlord anway so the CTax liability question won't really come up.
                  Previously served 10 years as a council tax advisor with a local authority but now self-employed with my own council tax consultancy.

                  If your local authority disagrees with any aspects of your council tax claim, as they are free to do so, a Valuation Tribunal appeal may be required.

                  Comment


                    #10
                    Originally posted by ss002d6252 View Post
                    buzzard1994,

                    Providing they are resident in the property (or using it as term time accommodation) and they remain a full time student then any exemption still applies and the tenancy makes no particular difference to that.
                    Thanks, rather late. Yes they'd still be a student and it would be term time. However I think plans may change now anyway.

                    Comment


                      #11
                      What if your long term tenant that is now on a periodic tenancy stops working to become a full time student (either on site or via open university)?

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