A rose by any other name might stink

I don't know why they are calling it a council tax rebate. As far as I can see, it has very little to do with council tax. The local authorities (who set and collect council tax) are not involved and nothing changes from their point of view. It bears no relation to the actual council tax paid by individual soldiers which, again, will not change. It would seem to be nothing more than a fairly derisory (6%) increase of £140 on the operational allowance. The Guardian reports:

Members of the armed forces deployed in Iraq and Afghanistan will each be given a £140 council tax rebate, the defence secretary, Des Browne, announced today.
The tax-free sum will be payable to all troops on a six-month tour of duty who pay council tax for a property in the UK.
...
The rebate will be added to the tax-free operational allowance paid to servicemen and women at the end of an operational tour in Afghanistan or Iraq. That allowance is currently worth £2,320 over a six-month tour of duty in Iraq or Afghanistan.

If I were a soldier, I would not be tempted to regard it as a big deal. (And the operational allowance for the armed forces is absolute peanuts compared to the foreign service allowances paid to FCO staff posted overseas.)