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Newsletter issue – May 2026
Q: I'm converting a non-residential property into my new home. I've heard that I may be able to use the DIY Housebuilder Scheme but am unsure what it is. Can you explain?
A: This is a scheme provided by HMRC that allows people converting an existing building into a new home to reclaim some of the VAT they've paid - mainly on materials used in the project.
It applies to specific types of buildings being converted into residential homes: barns, old churches, schools, warehouses and business premises.
VAT on building materials can be a substantial cost, so knowing how to apply correctly - and what qualifies - can significantly reduce the overall budget of a conversion project. Claims need to be made within six months of project completion.
Q: The new tax year has seen my council tax rise significantly. Is there anything I can do to reduce my bill?
A: Council tax bills in England have risen by an average of 4.9% this tax year. The typical Band D bill now stands at £2,392 per year, which is £111 more than last year. So, the first thing you can do is check that your property is in the correct band.
Are your neighbours' properties similar to yours, but in a lower band? Are you in the same band but your property is smaller? If so, you could challenge your property's band. The process is quite involved and could result in your band increasing, so should be researched thoroughly first.
Also, councils offer several types of concessions on council tax for situations such as:
you are the sole occupant of the property,
only full-time students occupy the property,
your property has been adapted to meet the needs of a disabled person,
you, or a person you live with has a severe mental impairment.
It is worth checking with your local council to see exactly what criteria need to be met for the above.
Q: Can I pass on recently inherited cash (£10k) from my mum to my kids as a gift from surplus income (as I don't need it), and avoid inheritance tax?
A: I'm afraid that you cannot treat a £10k inheritance as 'surplus income'. Money received from a will is capital, not income. The 'normal expenditure out of income' exemption only applies to regular income (pensions, salary, investment income).
What you can do with the inheritance is use your £3k annual gifting allowance, plus any unused allowance from the previous tax year. Anything above this becomes a Potentially Exempt Transfer (PET) which fall outside your estate if you survive seven years after gifting.
You could ask for a Deed of Variation, whereby you redirect part of your inheritance within two years of death. This would treat the gift as coming from your late mother's estate, not you. All affected beneficiaries must agree in order for this to be actioned.
