I think if she has her own house/flat and is using this rental only to get into the catchment area it is illegal (I am not sure which provision but I think this came up in the news recently when a council snooped on a family they suspected of doing school shopping See http://www.theregister.co.uk/2008/04/11 ... ncil_ripa/
). Perhaps, if she did not have her own place and was taking your place on rent (even if only for 6 months) and clearly living there, the situation would have been different. She would have been in the clear. But given the facts, her position can be considered unlawful. If you support an unlawful activity, you could get involved in the consequences if the council investigates her. If you did not know her intentions, you would have been in the clear. But again, you do know, so it is not advisable for you to involve yourself in this deal. However, you could research the particular law and see if actually paying you rent (instead of just using your address) gives her any legal footing. Will she pay council tax for your property etc? At least in the Poole case they were verifying actual residence.
If in doubt, and wanting to opt out of this, you can show her what everyone is advising you so that she does not mind. best, d