In respect of annexes, there is already a Council Tax exemption where it is occupied by a dependant aged 65 years or over, or if severely disabled.  However, it does not apply to families. From 1 April 2014, The Council Tax (Reductions for Annexes) (England) Regulations 2013 will offer a discount of 50% council tax for annexes occupied by relatives In England.
The discount applies if the following conditions are met:
- the annex forms part of a single property  which includes at least one other dwelling; and
- it is being used by a resident of that other dwelling or,
- it is the sole or main residence of a relative of the person who is liable to pay council tax in respect of that other dwelling.
A person (“P”) is to be regarded as the relative of another if P—
- is the spouse or civil partner of that person, or
- is that person’s parent, child, grandparent, grandchild, brother, sister, uncle or aunt, nephew or niece, great-grandparent, great-grandchild, great-uncle, great-aunt, great-nephew or great-niece, or
- is that person’s great-great-grandparent, great-great-grandchild, great-great-uncle, great-great-aunt, great-great-nephew or great-great-niece
A relationship between two persons who are not married but are living together as a married couple shall be treated as a spouse and a relationship between two persons of the same sex living together as if they were civil partners shall be treated as a relationship by civil partnership. Step children are treated as being the child of the person.
According to the Department for Communities and Local Government,  there are an estimated 24,150 family annexes in England, but ministers believe far more households could be helped by tax cuts that encourage more annexes – and more conversions of outbuildings and new extensions.
- New Council Tax cut for families staying together – Press releases – GOV.UK ↩
- “single property” means a property which would apart from the Council Tax (Chargeable Dwellings) Order 1992 be one dwelling within the meaning of section 3 of the Local Government Finance Act 1992 ↩