Can I pay vendors solicitors fees ???

betsie

Hi
Offered £250k on a house which was refused. We can go up a bit more but not if we have to pay the extra 2% stamp duty.

I spoke to my solicitor's assistant re fees and she seemed to think it was ok to pay a vendors solictors fees and EA fees to avoid going over the £250k stamp duty threshold whilst giving the vendor an extra £5k in real terms.

Has anyone done this? I don't want it to be accepted and then be stung by the IR for the extra stamp duty in 6mths time (as we don't have the £).

Thanks

LandyAndy

I think that would be Ok. You are paying a market rate for a service.

firstaspect

You probably can as long as what you are paying is the rate for the services given. However if the house is on the market at not much over £250k then they are very unlikely to get any offers over that amount because of the stamp duty so maybe you can hold your ground and get them to come down to accepting your £250k offer straight up?

JQ.

I'm suprised at that response from the solicitor. You're effectively giving the vendor a £5,000 cash backhander. How you give them that cash is surely irrelevant - as payment for fixtures and fitting, cash payment in a brown envelope, payment of fees, £5,000 of jellybeans or a new car. Whilst it may not be illegal I'm surprised that HMRC would not take an interest in such a payment. However, I'm no expert on this so I could be completely wrong - this is just my opinion.

You will, however, have to disclose it to your mortgage company as you are effectively paying £255,000 for the house which will affect your mortgage.

timmyt

betsie wrote: »

Hi
Offered £250k on a house which was refused. We can go up a bit more but not if we have to pay the extra 2% stamp duty.

I spoke to my solicitor's assistant re fees and she seemed to think it was ok to pay a vendors solictors fees and EA fees to avoid going over the £250k stamp duty threshold whilst giving the vendor an extra £5k in real terms.

Has anyone done this? I don't want it to be accepted and then be stung by the IR for the extra stamp duty in 6mths time (as we don't have the £).

Thanks

NO, like you are the first person in 50 years to think of that.

The answer is no.

Why? Here is a simple example.

You buy a house for £200k. The Seller says pay him 10 cheques of £20k, one to each of his grandchildren as birthday gifts. Not matter where the sellers money is going...to his grandchildren, or to his lawyer to pay his bill....you are paying him anything because you are buying his house.

You do it, then the seller, buyer, both sets of lawyers and any estate agent are committing a fraud on the Inland Revenue and they can fine and imprison.

You don't have a 'solicitor' acting for you. Bet you went cheap and have someone untrained acting for you.

Good luck OP

sunshinetours

I think some more bargaining would be a better idea. They are basically refusing an offer within £3-4k or so on £250k?

Noone else is going to offer £255k so I would say hold your nerve.

As far as your question is concerned your solicitors assistant probably should be careful, if they are deemed to be offering legal advice in a transaction that potentially involves tax evasion

You cannot offer £255k for the house for example including £5k for vendors professional fees as that would be linked to the value attached to the property purchase, and stamp duty LT of 3% on £255k would be chargeable
What is slightly greyer is if you received an invoice from the estate agents in your name which you paid once sale had gone through, as to whetehr this would be linked to the property price (I don't see how it can as you have an invoice for a service in your name, especially if you signed terms and conditions with the agent)

I am not however a solicitor so you would need to run through this carefully with someone who knows the SDLT rules well (not all solicitors do unfortunately)

My advice however is still negotiate harder and aim to get the property for £250k (how much is it up for)

[Deleted User]

The vendor did say solicitor's assistant suggested this. Perhaps OP should let the solicitor know what his/her assistant is saying.., could save that solicitor a heap of trouble at some point.

timmyt

sunshinetours wrote: »

I think some more bargaining would be a better idea. They are basically refusing an offer within £3-4k or so on £250k?

Noone else is going to offer £255k so I would say hold your nerve.

As far as your question is concerned your solicitors assistant probably should be careful, if they are deemed to be offering legal advice in a transaction that potentially involves tax evasion

You cannot offer £255k for the house for example including £5k for vendors professional fees as that would be linked to the value attached to the property purchase, and stamp duty LT of 3% on £255k would be chargeable
What is slightly greyer is if you received an invoice from the estate agents in your name which you paid once sale had gone through, as to whetehr this would be linked to the property price (I don't see how it can as you have an invoice for a service in your name, especially if you signed terms and conditions with the agent)

I am not however a solicitor so you would need to run through this carefully with someone who knows the SDLT rules well (not all solicitors do unfortunately)

My advice however is still negotiate harder and aim to get the property for £250k (how much is it up for)

all 'solicitors' who do conveyancing do. but most people on this website pay peanuts end up with someone without any real legal training

comparing conveyancing firms is like comparing apples and oranges, you can't. two firms one charging £400 and another £500, ask what the £400 firm are not doing. I never price match as we are virtually all 'solciitors' in my Team whereas our competitors are not and some have no legal qualifications...yet they are only £50 off us....bad luck their clients!

timmyt

deannatrois wrote: »

The vendor did say solicitor's assistant suggested this. Perhaps OP should let the solicitor know what his/her assistant is saying.., could save that solicitor a heap of trouble at some point.

clever response, dead right there

betsie

Ooh some people on here do seem to get out of bed on the wrong side !!!.

House on for £279,950 but has been on for 7 months. Vendor offered to pay half the stamp duty so to clear £255k he would need an offer of around £260k (taking into account stamp duty, extra EA's and sols fees).

Did not speak to the solicitor only his assistant about my proposal and no I did not go cheap - it is a well regarded local firm of solicitors who I have used on two previous house purchases.

I have not suggested this offer to the vendor yet as I wanted to check out the legalities of it first and just ask if anyone else had done this.

sunshinetours

timmyt wrote: »

all 'solicitors' who do conveyancing do.

No they don't. I get a number of general tax queries from solicitors who clearly don't understand in full many tax rules. Possibly they don't keep up to date I don't know but certainly not all qualified conveyancers or solicitors understand tax rules.

Choosing any service professional is difficult. Legal services even more so and from next year when market is opened up further there will be even more non-solicitor based firms offering certain legal services.