Tower Hamlets Council Tax Reduction Income Limit and Capital Threshold 2026/27

Tower Hamlets does not publish a single income limit for Council Tax Reduction because there isn't one. The scheme uses a means test that compares your household income against a calculated "applicable amount" — a baseline figure that varies by household size, disability status, and carer responsibilities. What the scheme does have is a hard capital ceiling.

The £6,000 Capital Limit

This is the capital cut-off for working-age applicants. If you and your partner hold combined savings, investments, ISAs, premium bonds, or shares worth more than £6,000, you are completely excluded from CTR. No exceptions, no taper — it is a cliff edge.

Capital at or below £6,000 meets the capital test; your income and the other scheme rules still determine whether you receive an award and how much it is.

Pension-age applicants have a higher ceiling of £16,000. Capital above £16,000 is disregarded for applicants receiving the Guarantee Credit element of Pension Credit.

How the Income Test Works

If your capital passes, the council compares your weekly income against your applicable amount:

• Income at or below the applicable amount → you receive up to 100% council tax reduction (subject to non-dependant deductions)
• Income above the applicable amount → your award is reduced by 20p for every £1 of excess

The applicable amount is built from personal allowances (set annually, varying by age and whether you are single, part of a couple, or have children) plus any premiums for disability, caring, or severe disability.

What Counts as Income

Earnings from employment (after tax, NI, and half of any pension contributions), self-employed profits (or the Minimum Earnings Floor if you have traded for over 12 months), most DWP benefits, occupational pensions, and maintenance payments.

Child Benefit is included in the countable-income calculation. Check the council's current rules before treating another benefit or payment as disregarded.

A Worked Example

A single working-age resident in a Band B property (£1,400 annual council tax) applies the 25% Single Person Discount, leaving £1,050 net liability. They receive Universal Credit and hold £1,200 in savings.

Because their UC income sits below the applicable amount and they have no non-dependants, the award covers 100% — their bill drops to zero.

Change one variable — add an adult child earning £380 per week living in the home — and the non-dependant deduction rule wipes out the entire award. The household pays the full bill.

Don't Confuse CTR Limits with the Relief Fund

The Mayoral Cost of Living Relief Fund has a £60,000 household income limit and a £16,000 capital limit. It is a completely separate discretionary scheme for households that do not qualify for CTR. You cannot receive both.

The Tower Hamlets Council Tax Reduction Guide includes the complete means test calculation, the applicable amount tables, and four worked examples covering different household setups.

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