Help with house purchase in 2008

Stevies_problems_2

We bought a house in Feb 2008 for £249,999.
We agreed to pay the estate agency fees on behalf of the vendors of £3,750.

OH was an etate agent there and for three months forfeited his salary to pay off the loan for the fees of £3,750.

We have been contacted yesterday by the estate agency (who OH no longer works for) to say that an invoice was never raised and that not only do we owe VAT on the transaction of £656.25, but also that the loan should have been taken from OH net salary (it was taken from gross) and therefore we owe an additional £825 on the loan!

We have also now been told that as we paid the fees on the purchase, this pushes us over the stamp duty limit and therefore we also owe £5k extra stamp duty.

This is obviously a nightmare situation. Can anyone help me out with this? Is there anything we can mitigate?

I would also like to add that it was the director who negotiated the purchase (and the payment of the estate agents fees on their behalf) not OH.

jenny74

I don't know about the rest, but the stamp duty is paid at the time of completion VIA THE CONVEYANCER, so this sounds very dogy to me!!!!

I would tell the EA that you are referring this to your solicitor for legal advice and then see what they say... definately trying to pull a swift one on the stamp duty.

Cannon_Fodder

What did your solicitor say at the time? What was put in writing about the Fees/loan?

Just because the Director did the negotiating, doesn't mean you had to accept the deal offered.

I doubt the Tax-man will let you off the Stamp Duty. see http://www.guardian.co.uk/money/2009/jul/01/stamp-duty-avoidance
"HMRC told me that however payment is made, paying the seller's estate agent fees means there is a "transfer of economic value from buyer to the seller" and this counts as part of the total amount of the transaction when calculating stamp duty."

Whether the EA can pursure you for the balance depends on the paperwork.