Council tax when someone dies
When someone dies, everything they owned and any debts they had become part of their ‘estate’. A personal representative is appointed to deal with the estate;
- If the person left a will, the representative is called an executor.
- If there is no will, the representative is called an administrator.
The personal representative must apply to the Probate Court to act on behalf of the estate. The court issues a grant of probate to the executor, or a letter of administration to the administrator, giving them legal authority to access the deceased’s assets and settle any debts, including council tax.
Duties of the personal representative
The personal representative has a legal duty to ensure that all outstanding liabilities/debts of the estate (including council tax) are paid in full before distributing any of the remaining assets to beneficiaries in accordance with the Administration of Estates Act 1925.
If there is not enough cash in the estate to repay all the debts, the personal representative may need to sell assets (such as a house or personal property) to raise funds. Failure to settle all debts before distributing assets may render the personal representative personally liable for any unpaid amounts.
Many personal representatives will seek legal advice or instruct solicitors to handle the process for them.
If there are insufficient assets (including equity of owned property) to repay all the debts owed, the estate is insolvent and special rules apply to decide which creditors are paid first.
Council tax on properties left empty because someone has died
Where a property is left empty because someone has died, there is no council tax charge from the date of death until one of the following happens:
- six months have passed since the grant of probate or letters of administration (after this period, additional empty property premiums may apply), or
- the property is sold, transferred to a beneficiary, or reoccupied
Dealing with properties owned by the deceased
When someone dies who had sole ownership of a property, the property becomes part of their estate. It remains in the estate until it is sold or legally transferred by the personal representative and the Land Registry is updated. Any council tax owed remains payable from the estate until the change of ownership has been completed. If there is not enough cash in the estate to repay debts, the personal representative may need to sell the property to raise funds.
It is very important that personal representatives update the Land Registry when the property is sold or transferred.
- If the property is being transferred to a beneficiary, the personal representative must notify the Land Registry by completing forms AP1 and AS1.
- If the property is sold to someone else, the transfer is normally completed by a conveyancing solicitor using a TR1 form.
If a property is given to a beneficiary but not transferred by updating the Land Registry, it legally remains part of the deceased’s estate (even if it’s rented out or occupied by the beneficiary). If the property remains empty, ongoing council tax charges will increase the estate’s debts. If the Council tax is not paid, the Council can obtain a charging order on the property and recover the debt by a forced repossession and sale.
If a personal representative sells or transfers a deceased’s property without settling known council tax debts, and no other assets remain, the council may apply to a court for an Insolvency Administration Order to declare the estate bankrupt. A trustee is then appointed who can reverse transactions made by the personal representative, including property transfers. If assets were distributed before debts were paid, personal representatives may be held personally liable for the council tax debt.
Jointly owned properties
If the person who died owned the property as a joint tenant, the property automatically passes to the surviving owner and does not form part of the deceased's estate.
If the person who died owned the property as a tenant in common, the deceased's share becomes part of the estate and can be sold to repay any outstanding debts.
Keeping in touch with us
We will send letters to the property asking for information about the estate so we can make sure council tax is billed correctly. We may ask for:
- the name and contact details of the personal representative(s)
- confirmation of the date of death, probate date and other relevant information
You can contact us at any time to provide this information by completing our online form:
www.manchester.gov.uk/ctaxcontact
Further support and advice