Planning Status of Annexes � Permitted Development and Separate Dwelling
Permitted development rights (GPDO 2015 Schedule 2, Part 1 � householder development): cover the physical works for outbuilding construction and garage/outbuilding conversion within size and height limits; do NOT authorise the creation of a new self-contained separate dwelling; using a converted outbuilding as a self-contained letting (own kitchen, bathroom, separate entrance, meter) without full planning permission for a new dwelling = breach of planning control; s.100ZA TCPA 1990 restricts LPAs to imposing pre-commencement conditions only with applicant agreement or where necessary. Ancillary vs separate dwelling (planning fact and degree): separate dwelling indicators � self-contained facilities (own kitchen, bathroom, sleeping, separate entrance); can be occupied independently; let to a stranger on the open market; no functional relationship to the main household; Gravesham BC v SOSE [1984]; ancillary indicators � connecting internal door to main house; occupied by a dependent relative who is part of the main household; no separate utility meter; same council tax and address as main dwelling. Article 4 direction: in many areas, Article 4 directions remove PD rights � check with the LPA before relying on PD rights for annexe works. Scotland: Town and Country Planning (Permitted Development) (Scotland) Amendment Order 2012 � similar principles but different categories and size limits. Wales: Welsh PD regime differs from England in some respects.
Council Tax, CGT, SDLT, and Income Tax Implications
Council tax: self-contained annexe (own kitchen, bathroom, entrance) = separate VOA council tax band = separate bill in addition to main dwelling; dependent relative discount (LGFA 1992 s.11A): 50% discount where the annexe is the sole or main residence of a person aged 65+, severely mentally impaired, or substantially permanently disabled; ancillary annexe with no separate kitchen = typically included in main dwelling's council tax assessment; holiday let available 210+ days + actually let 140+ days = business rates (not council tax) � small business rates relief may eliminate liability; empty annexe premium: many councils charge 25%�100% council tax premium on long-term empty domestic properties. CGT and private residence relief: annexe used as part of main dwelling = PRR applies on same basis as main house; annexe let to third party = no PRR for that portion; apportionment of gain required where use changed over the ownership period. SDLT multiple dwellings relief (MDR): may be available if the annexe constitutes a genuine separate dwelling on purchase; HMRC scrutinises MDR claims carefully � the annexe must be self-contained and functionally independent; the government reversed a proposed abolition of MDR for annexe purchases in 2024. Income tax: rent-a-room scheme (�7,500 p.a. exemption for furnished accommodation) applies only to accommodation within the same building as the landlord's principal residence � NOT to a separate outbuilding annexe; full rental income from an outbuilding annexe is taxable (subject to allowable expenses and the �1,000 property income allowance). Planning and tax: planning status and tax treatment are assessed independently � the VOA and HMRC make their own determinations regardless of the LPA's view.