K J Smith Solicitors

New Tax Cuts Announced For Families Staying Together

Published: 2 September 2013

New government plans were announced over the bank holiday weekend to reduce unfair council tax surcharges on family home improvements and family annexes used to house or support extended family members.

The current 'family tax penalty' applies to family homes who have an extension or stand-alone annex to allow them to care for their family members through double taxation - so the home owners face council tax charges for any annexes in addition to the council tax bill for their main property.  

With younger people finding it increasingly difficult to get on the property ladder and care home fees increasing for the elderly, many families choose to extend their family home or even build self-contained annexes to provide affordable accommodation for family members both young and old.

This is just one of three taxes that are being cut, with the government also removing the community infrastructure levy on self-build homes, which is to include all home extensions, annexes and home improvements. A 'stealth-tax' introduced by local town halls under Section 106 is also being removed - this cut housing levies on such annexes and extensions.

The government hopes these new tax cuts will not only help to encourage more families to live together but to also reduce long-term adult social care costs, increase housing supply and to help support the construction trade.

Local government secretary Eric Pickles explains, "I believe the government should be supporting hard-working families who do the right thing. Removing the family tax penalty on annexes and home improvements will help provide more affordable housing and strengthen the bonds that tie society together.

These common sense tax cuts will increase the provision of affordable housing to those on lower and middle incomes. Encouraging extended families to stay together will reduce social care costs to the taxpayer, and protect independence and dignity for the young and old."

It seems the government are putting more focus on helping families as this change in legislation follows on from government plans earlier this year to legally enforce the use of family mediation. This new law, which is currently being passed by Parliament is designed to help separating couples to resolve their differences amicably through the use of a family mediator instead of settling family disputes in court.

K J Smith Solicitors have a team of qualified family mediators who specialise in helping couples to work together to resolve disputes in a cooperative manner.

This approach helps couples to reach a positive outcome whilst reducing the amount of heartache caused during a period of separation. For more information, contact K J Smith Solicitors today on 01491 630000 (Henley-on-Thames), 0118 418 1000 (Reading) or 020 7070 0330 (Central London).

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