Class W Council Tax Exemption: Annexes Occupied by Dependent Relatives

What Class W Does

Class W is a 100% council tax exemption for separately banded annexes in England. When it applies, the council tax bill on the annexe drops to zero — not a discount, a full exemption.

It comes from the Council Tax (Exempt Dwellings) Order 1992, and it has been available since council tax began. The catch is that most families do not know it exists, or assume it only applies in narrow circumstances.

Who Qualifies as a Dependent Relative

The annexe must be the sole or main residence of a relative of a person who lives in the other dwelling, and the relative must meet at least one of three statutory tests:

Aged 65 or over. This is the most common route. A parent, grandparent, aunt, uncle, or in-law aged 65 or older qualifies automatically. They do not need to be financially dependent or receive any care. A fully independent 72-year-old mother living in the annexe meets the test based on age alone.

Severely mentally impaired (SMI). The relative must have a medical certificate from a registered practitioner confirming severe mental impairment, plus entitlement to a qualifying benefit such as Attendance Allowance, PIP daily living, or the daily living component of DLA. Conditions that commonly satisfy this include dementia, severe stroke, and Parkinson's disease.

Substantially and permanently disabled. The relative must have a physical or mental disability that is both substantial and permanent, arising from illness, injury, or congenital deformity. Receiving PIP or Attendance Allowance supports the claim but is not the only form of evidence councils accept.

The "Relative" Definition Is Broad

The statute defines "relative" widely: spouse, civil partner, parent, child, grandparent, grandchild, sibling, uncle, aunt, nephew, niece, and all the great- versions. Relationships through marriage or civil partnership count as blood relationships. Stepchildren count as children. Half-blood relationships count as full-blood.

A grandmother, a nephew, a step-parent, or a great-aunt can all satisfy Class W if they meet one of the three dependency tests.

When Another Person Also Lives in the Annexe

Class W requires the annexe to be the sole or main residence of a dependent relative. The legislation does not require that relative to be the annexe's only occupant, so another adult living there does not by itself defeat the exemption.

For example, an 80-year-old mother and her 30-year-old non-disabled grandson share the annexe. The mother meets the age test; the grandson does not, but his presence alone does not decide the Class W claim.

If no resident meets a dependency test, the 50% family annexe reduction under SI 2013/2977 may be available if its separate conditions are met.

Temporary Absences

A dependent relative who enters hospital does not automatically lose Class W status. Provided the annexe remains their sole or main residence — they intend to return and have not moved permanently — the exemption continues during the absence.

If the absence becomes permanent (for example, a move into residential care), the exemption ends. The annexe may then qualify for a Class T exemption if it is unoccupied and a planning condition prevents it from being let separately.

How to Claim

Class W is claimed from your local billing authority (the council), not from the Valuation Office Agency. You will typically need:

• Proof of the relative's age (passport, birth certificate)
• Medical certification if claiming under the SMI or disability route
• Evidence the relative lives in the annexe as their sole or main residence (electoral register entry, utility bills, GP registration)
• A declaration of the family relationship

Most councils process applications within 21 to 28 working days. If the exemption is granted, the council issues a revised demand notice and refunds any overpayment. If it is refused, you have the right to a formal internal review under Section 16 of the Local Government Finance Act 1992.

Our Annexe Discounts and Exemptions Guide includes an evidence checklist for each Class W qualifying route and a template letter for requesting a Section 16 review if your claim is turned down.

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