HMRC internal manual

Inheritance Tax Manual

IHTM10161 - Other assets due to the estate - Council Tax rebanding

It is possible for the owner of a property that once belonged to the deceased to apply to the local council for the property to put into a lower Council Tax band. If the council agree, they will repay overpaid Council Tax to the previous owner(s) of the property, which may include the personal representatives of someone who has died. The right to apply for rebanding is an asset of the estate at the date of death. It is not always certain, however, that the council will agree to the rebanding and there may be some delay in receiving any repayment. For this reason, the value of the right will be the amount of Council Tax that is to be refunded with an allowance to reflect uncertainty and delay. You may accept a claim for a discount made by the taxpayer or their agents against the value of the refund if it is 50% or less of the value of the Council Tax repaid.