Class Q – Property of a bankrupt person

A Class Q exemption applies when a property becomes unoccupied because the person who would normally be liable for Council Tax has been declared bankrupt, and the property is now under the control of the trustee in bankruptcy.

This exemption ensures that individuals undergoing bankruptcy proceedings are not charged Council Tax on a home that they no longer have legal control over.

A property qualifies for Class Q when all of the following conditions apply:

• The property is unoccupied. The property must be completely empty. If anyone occupies it – including tenants, relatives, or squatters the exemption cannot apply.
• The liable person has been formally declared bankrupt. A court must have issued a bankruptcy order. Being in debt or entering informal arrangements (e.g., Debt Management Plans, IVAs) does not qualify.
• The property is vested in the trustee in bankruptcy. Once bankruptcy is declared, control of the debtor’s assets – including property – passes to a trustee in bankruptcy.

The trustee may be:

• The Official Receiver, or
• An appointed Insolvency Practitioner

From this point, the bankrupt individual no longer has legal possession or control, and the trustee may decide to sell or manage the property.

The bankrupt person is no longer entitled to occupy the property. This is critical.

Class Q applies only when the bankrupt individual cannot legally live in the property because:

• possession has passed to the trustee, and
• they have no right to remain in the home

A property does not qualify for Class Q if:

• The owner is bankrupt but still living in the property. If the bankrupt person continues to occupy the home, it is not unoccupied, so Class Q cannot apply.
• The property has not been transferred to the trustee. If bankruptcy has begun but possession has not yet legally passed, Class Q does not apply.
• Someone else has moved into the property.
• Any form of occupation voids the exemption.
• Bankruptcy is not formal.

The following situations below do not qualify unless an official bankruptcy order has been made, these include:

• being in mortgage arrears
• having court judgments
• being in a debt management plan
• entering an IVA
• the property has already been sold

Once the trustee sells the property, Class Q ends immediately and liability moves to the new owner.

For as long as:

• the property remains unoccupied, and
• the property remains vested in the trustee in bankruptcy, and
• the bankrupt person has no right of occupation.

There is no maximum time limit, although the exemption typically ends when:

• the property is sold as part of the bankruptcy process,
• a legal right of occupation changes, or
• someone moves into the property.

The trustee is not liable for Council Tax while the Class Q exemption is active.

If you want to apply for a Class Q exemption or have a question

Use the Council Tax contact form and choose the following options:

• Under which service would you like to contact us? Select Council Tax
• What would you like to contact us about? Select Something else