Paying separately for some items

sebtomato

(removed, no longer relevant)

SmlSave

Just to let you know that any solcitor worth their salt that hears about this will put any extras on the contract as Chattels. Not sure if this effects the Stamp Duty but please be carefull as there are serious fines for misleading the HMRC

tux900

Hi Seb,

Anything 'moveable' which doesn't form an inherent part of the property is not subject to stamp duty.

Hence: carpets, curtains, appliances (non-builtin), furniture, a freestanding basic shed, etc would all be duty free.

Your solicitor will be able to advise on the specifics of your situation, including what is and isn't covered that you are considering.

As they are still forming part of the sale they will, as SmlSave says, be listed/recorded as chattels. They will need to be realistically valued in order to defend any potential accusation of tax evasion.

Regarding valuation, only you can determine that as we do not know the age/quality of what you're buying (e.g. off the roll Carpet-Right special, or handweaved-by-virgins Axminster?). On the face of it I'd say £2k-£3k is way too high.

Incidentally, these days where we have the situation of carpets being a standard feature, and not a luxury of the very wealthy and hence with a value of high proportion compared to the property, it is more common - if not the norm - for carpets to be included as part of the sale i.e. you would not necessarily be expected to pay extra for them (or, conversely, it would be quite reasonable to expect the carpets to be included in any given offer). Of course, it is an issue between buyer and seller - and this detail would come out automatically on the fixtures and fittings form - but I thought it worth pointing out in case you had any (mis)assumption that separate payment for carpets is always a given.

Mathew

Edit: There's everything you need to know at http://www.hmrc.gov.uk/manuals/sdltmanual/sdltm04010.htm

poppysarah

Carpets are normally left. Only the slightly insane (or people with brothers who are carpet fitters take them)

Get new carpets if they refuse to leave them.

Curtains - depends if you like them.

About £50 each for white goods.

Soot2006

We paid £1k for washing machine, fridge, nice/new 3-piece suit, 2 tall wardrobes, all curtains/carpets/light fittings (all v nice and good condition) -- solicitor said that would be fine.

jockosjungle

I'd ask if they're planning to leave them, a second hand fridge isn't expensive, carpets are but the only reason to take them is to spite the new owner as they have no second hand value. Get ne'w curtains from IKEA, you are doing the seller a favour by taking the crap as they don't need to toake them to the dump.

What it sounds like you are doing is trying to avoid stamp duty by paying £250k for the place and giving some more for things so the seller gets more money.

Free tip for you, HMRC are pretty clever. You think they won't look at cases where homes have sold for just under the threshold? Whethere you are being honest or not with this transaction it looks odd when you are paying thousands for a few old carpets and an old fridge!

R

sebtomato

(removed, no longer relevant)

tux900

sebtomato wrote: »

I don't mind paying a couple of thousands on top of it.

That's fine, just make sure that the figure you pay will match up with what HM Revenue may consider reasonable!

sebtomato wrote: »

I guess the flaw from the tax side is that you need to own the item on the day of purchase, but there are no laws about buying something and getting rid of it a week later.

There's no flaw - you just misunderstand the purpose of SDLT.

Stamp duty is payable on the transfer/sale of property, not anything else the seller may want to sell you at the same time.

The fact you can buy some of the seller's personal items and then resell is irrelevent. They were never subject to tax in the first place hence what you subsequently do with them is of no interest to anyone else.

Mathew

martindow

I think you need to be very cautious. As others have said carpets and white goods normally have a negligible resale value. If you agree to 250k + 2k say for chattels you run the risk of HMRC saying that the chattels were only worth 1k therefore the house effectively sold for 251k and you owe SD. You need to have rock solid evidence to back up the valuations to be safe.

sebtomato

martindow wrote: »

I think you need to be very cautious. As others have said carpets and white goods normally have a negligible resale value. If you agree to 250k + 2k say for chattels you run the risk of HMRC saying that the chattels were only worth 1k therefore the house effectively sold for 251k and you owe SD. You need to have rock solid evidence to back up the valuations to be safe.

Thanks. We are estimating items one by one based on their original price and current used price, and then we will see how much the total is. It could add up to not much indeed.

jockosjungle

Yes thats what you need to worry about, if you buy a house for under £250k then fine, if you pay what the chattels are worth, then fine. However if what you are doing is agreeing to pay £250k for the house and then £3k for the chattels but they're worth £1k you are pretty much screwed.

If you've simply agreed to buy them for their value (which is actually small) you will be fine, if not you may find that HMRC want to investigate your transaction, you can't justify what you paid and you pay the £8k in SDLT, plus interest and plus a penalty

R