How much hard cash may I accept for house?

Markos_2

I am selling my house and have been made a provisional offer by what appear to me to be a very genuine and honest couple. They are happy to pay what I have asked (although, I did reduce it slightly) however, they cannot afford to pay the entire amount through their bank and have asked if I will accept some 'hard cash' as part of the payment.

This of course will reflect on the amount actually shown on the final contract.

I have asked for two or three days to think about this as I am not sure of any detrimental consequences for myself.

This is where you guys come in! Is anyone able to tell me if:

1) It is legal for me to accept cash?
2) What is the maximum that I may accept?
3) I intend paying the cash into my bank immediately, will they ask anything?
4) Whether it be in two months or two years I do intend buying another property. Will the history of the money in my bank be questioned on this next purchase?

I hope my questions have made sense!

I have tried to locate websites that can advise the 'man in the street' about money laundering issues (as opposed to commercial outfits).

Is there perhaps anything else that I may not be aware of?

Any offer of advice would be appreciated and preferable explained in the simplest of fashion (I don't do accounting speak!).

Much obliged

Markos

McKneff

Something sounds fishy, how is it that they cant afford it then give you hard cash which proves they can afford it.
Suggest that they put the money (cash) in the bank and pay it through the normal way.

In any event, speak to your solicitor - he's the best person to advise.

mac2008

Do you really have to ask if this sounds legit? Best case is they're trying to rip off the taxman, worst case is much more sinister.

There are so many potential problems with what they're suggesting I'd run a mile.

mkaibear

Markos wrote: »

1) It is legal for me to accept cash?
2) What is the maximum that I may accept?
3) I intend paying the cash into my bank immediately, will they ask anything?
4) Whether it be in two months or two years I do intend buying another property. Will the history of the money in my bank be questioned on this next purchase?

1) Yes
2) As much as you like
3) Yes, they will ask where you got the cash if it's more than a certain amount (not sure why that is) and you will probably have to fill out some anti-money-laundering forms (or at least answer some questions). "This is from a house purchase, here is the contract" is a legitimate answer.
4) No.

bris

You should ask them to lodge the cash with their solicitor, who will chaps it to yours. Their solicitors will have done identity checks etc on them so should be able to justify where they got a large amount of cash. If their solicitor refuses to accept it then they are unable to explain the cash and the police may take an interest in it.
If you take it and try and bank it, the bank must ask you to explain it as they will contact the police about it, so again the cash must have legit origins. Large unexplained cash piles are now seized so although cash used to be king, it is very risky to take anything over 5k if you don't know where it came from.

Jebrelli

McKneff wrote: »

Suggest that they put the money (cash) in the bank and pay it through the normal way.

Totally agree. If they have the cash they can pay it into a bank account and transfer it to you the normal way. Why wouldn't they do this?

Unless they are not intending to pay you the 'cash' part of the purchase price...?

HAMISH_MCTAVISH

Markos wrote: »

I am selling my house and have been made a provisional offer by what appear to me to be a very genuine and honest couple. They are happy to pay what I have asked (although, I did reduce it slightly) however, they cannot afford to pay the entire amount through their bank and have asked if I will accept some 'hard cash' as part of the payment.

This of course will reflect on the amount actually shown on the final contract.

I have asked for two or three days to think about this as I am not sure of any detrimental consequences for myself.

This is where you guys come in! Is anyone able to tell me if:

1) It is legal for me to accept cash?
2) What is the maximum that I may accept?
3) I intend paying the cash into my bank immediately, will they ask anything?
4) Whether it be in two months or two years I do intend buying another property. Will the history of the money in my bank be questioned on this next purchase?

I hope my questions have made sense!

I have tried to locate websites that can advise the 'man in the street' about money laundering issues (as opposed to commercial outfits).

Is there perhaps anything else that I may not be aware of?

Any offer of advice would be appreciated and preferable explained in the simplest of fashion (I don't do accounting speak!).

Much obliged

Markos

I assume the point of this is that they can avoid paying stamp duty if the house is below a certain threshhold?

Because otherwise the part of your post where you say they can only afford to pay a certain amount through a bank doesn't make sense....

Unless of course, their income is partly in cash also so they're trying to avoid declaring income.

Anyway.....

Difficult one. If they genuinely do have cash, it's hard to turn it down.

However you certainly don't want to be party to tax evasion.

So.....

1) It is legal for me to accept cash?

Yes.

But it's not legal to misrepresent a sale price on official documents for the purposes of avoiding stamp duty.

So if that does not apply, then there is no reason you couldn't split the sale in two. House and contents differently, for example. One paid through the banks, the other in cash.

2) What is the maximum that I may accept?

There is no maximum. Legal tender is legal tender. But you cannot hide receipt of funds for the purposes of evading tax.

3) I intend paying the cash into my bank immediately, will they ask anything?

Probably. You should tell them the truth and make sure you have signed receipts and proof of ID from the buyer.

4) Whether it be in two months or two years I do intend buying another property. Will the history of the money in my bank be questioned on this next purchase?

Unlikely.

There may be some issues around proceeds of crime recovery if they've gotten the money illegally, but you'd need to ask a lawyer.

And you should really ask your solicitor these questions before proceeding.... Because I'm not one.

The_Blue_Hatter

Markos wrote: »

This of course will reflect on the amount actually shown on the final contract.

This is the bit that sounds dodgy. As mentioned before you can accept cash and as much as you like but the bank will ask where it came from. If you sell your house for £100k and the couple buying it give you 40K cash and you run the house sale through solicitors as only a 60K sale there will be tax/money laundering issues for authorities to look at. If you run the sale through the solicitors at £100k including 40K cash then you shouldnt have a problem.

Hope that makes sense.

sonastin

What has your solicitor said? How do they plan to hand over the cash? Unless the money goes through the solicitors, they'll be very nervous about the transaction and the easiest way for that to happen is for them to pay the cash to their solicitor and him to go down the electronic transfer route to your solicitor. Then the problem becomes their solicitors...

zappahey

Markos wrote: »

This of course will reflect on the amount actually shown on the final contract.

Are you saying here that the contract would not reflect the full price paid, it would exclude the cash element?

What happens if they don't pay you the cash? There's no contract to say they owe you it.

Soot2006

Surely the "cash" is no different from the "deposit" most people pay toward house purchase.
It should certainly not affect the publicised/contracted price of the house!