£250k house plus £2-5k chattels

BornAtTheRightTime

LandyAndy wrote: »

For many years now HMRC have taken a keen interest in transactions around the SDLT break points.

I'm guessing they probably took a keen interest in my purchase then, and decided the Furnishings price was justified.

hedgehopper_2

BornAtTheRightTime wrote: »

If you're buying a house nowhere near the SDLT limit no-one questions the value of Furnishings. Ask yourself could you verify the price of them if you were paying £300k for the house. If the answer is yes then even if your purchase is scrutinised, you have nothing to worry about IMO.

Very interesting and a good way of putting it. I have an idea of what the items are worth (it's about 2.5k) so if they accept that, then on these grounds I think I'll feel more comfortable with it. But if we paid more, it would not be for the right reasons, hence why we shouldn't agree to it.

Our solicitor has been rather flaky, unfortunately, is not that experienced and TBH is we'd had one like yours I think we'd feel a lot better going ahead with this.

I too would be very interested in Richard Webster's advice on this thread!

Me too!

Richard_Webster

You complete the SDLT form saying that you are paying £250K for the property and the contract says £250K for the property and £X for the fittings and chattels.

There is no direct way that HMRC know how much is paid for the fittings and chattels. The SDLT Form doesn't have a space to fill in the amount for chattels and fittings sold separately.

Obviously if I was HMRC I would be investigating a random sample of properties changing hands for £250K (or £249,995 because people misguidedly think the figure must below £250K). I would ask if any chattels and fittings were purchased separately and if so ask for a list of them and the price. If the figures looked well over the likely second hand values I would ask for more information and justification of the amounts for each item. That's what I would do and I guess that is roughly what they do do in some cases.

Whilst I would never suggest that a client gets involved in a transaction where the figures are not reasonable second hand values for any chattels/fittings, I have to say I do not actually know of a case where my client's transaction has actually been investigated.

martindow

BornAtTheRightTime wrote: »

I bought a house in 2005 for £250k plus £5k for furnishings incl AGA, extra rooftiles, carpets and curtains and heard nothing more. Which was only fair because the value of said items easily added to £5k.

How did you get away with the AGA? Surely that is very much part of the house and rather different from things like curtains.

OP the second hand value of furniture, carpets and curtains is minimal so anything in four figures is likely to be very hard to justify if HMRC decided to take a look.

hedgehopper_2

martindow wrote: »

How did you get away with the AGA? Surely that is very much part of the house and rather different from things like curtains..

well, if it's anything like the AGA involved in our sale (there is one, coincidentally enough!) then it's my understand that it's to do with the fact that these items are free-standing.

hedgehopper_2

Richard_Webster wrote: »

If the figures looked well over the likely second hand values I would ask for more information and justification of the amounts for each item. That's what I would do and I guess that is roughly what they do do in some cases.

Whilst I would never suggest that a client gets involved in a transaction where the figures are not reasonable second hand values for any chattels/fittings, I have to say I do not actually know of a case where my client's transaction has actually been investigated.

Thanks very much Richard, that's really helpful.

I'm now fairly convinced that we proceed with a clear conscience provided we are genuinely satisfied with the amounts paid for those items. My main concern at present is that I know the amount they are asking is above what I would consider realistic, so on that basis I'll see if they will agree to our estimate and will not proceed if they don't.

the_flying_pig

Agree with all of the above.

£5,000 to me [2% of sales price] sounds like a hefty sum to spend on second hand fixtures & fittings unless there are some transparently very valuable and/or nearly new items involved .

£2,000 on the other hand sounds fairly unremarkable.

I'm fairly sure that HMRC does a leaflet on this?

LandyAndy

BornAtTheRightTime wrote: »

I'm guessing they probably took a keen interest in my purchase then, and decided the Furnishings price was justified.

..or they didn't look at it at all.

Of course you could 'get away' with paying £50k for F&F if the figure was justifiable. My point was really that it takes a lot of second hand F&Fs to be worth £5k. Far more IMO than is involved in the average transaction and far more than the average buyer anticipates.

When_is_the_reset?

Years ago I paid and additional sum for some furnishings and bits the vendor wanted to be included and I thought it would be a good idea. This was nothing to do with the stamp duty limits though.

Turned out it was more-or-less stuff that they couldn't be bothered (or were difficult) to move. It turned out to be a complete waste of money - I would suggest they take the lot with them and buy things you would actually choose for yourself.

You never know how much trouble the washing machine or fridge will be and have no come-back at all. Potentially stinky carpets and curtains are the same. Best off without them.

Another time a vendor wanted an extra £5k for a hottub in the shed. It was so built-in that it would have cost them that to get it out - I told them that I would reduce my offer if they left it behind.

LandyAndy

When_is_the_reset? wrote: »

Turned out it was more-or-less stuff that they couldn't be bothered (or were difficult) to move. It turned out to be a complete waste of money - I would suggest they take the lot with them and buy things you would actually choose for yourself.

That would be my reaction if someone wanted paying for carpets and curtains or free-standing white goods.