Fixtures and fittings stamp duty loophole.

TehJumpingJawa

I've just read this on Martin's 'UK's worst tax' blog entry and noticed the mention of this loophole.

Does anyone here have any experience of exploiting this loophole?

Precisely how much can you get away with? Is £5000 realistic?
What can be classed as a fixture/fitting?
Is it just lights & furniture and other removables?
How about an old asbestos garage? Or garden plants? Carpets?

How do you go about arranging a seperate purchase for said fixtures/fittings?

pararct

Fixtures and fittings can be construed to be anything which is not bolted down. Some house owners even remove the light bulbs before they go. The lighting pendant however would be part and parcel of the fabric of the property.

£5000 is a large amount, if this purchase is near the SD threshold it will attract much attention from HMRC.

G_M

HMRC are not stupid and look closely at property sales that ar just below the tax threshold!

The amount you pay the vendor for F&Fs must be realistic. Giving them £1000 for a 2nd hand fridge will have HMRC feeling your collar fast.

Look at ebay for realistic values of 2nd hand goods - the truth is that old furniture, curtains, fridges have pretty low values.

Light fittings are part of the property as is the asbestos garage! Garden plants too unless they are (removable) pot plants.

Curtains, carpets, kitchn white goods, furniture, pot plants, that ladder in the garage etc - all F&Fs.

You need a separate F&Fs list as part of the contract of sale (if using a solicitor - he'll deal with this as a matter of routine) listing everything, with price.

theartfullodger

Hopefully anyone evading tax will be nicked and fined shedloads, have days of their time wasted and fail to get through 't pearly gates as and when..


And the other party (seller presumably..??) will know the crook ain't to be trusted, are on the fiddle and will treat them with the greatest suspicion. Expect great difficulties and quite likely fiddling back to you sunshine.. Me, I don't do business if at all possible with crooks, cheats & bigots - if I know that;s what they are...

Old asbestos garage eh?? Blimey, health hazard according to many...


Cheers!

Artful

TehJumpingJawa

theartfullodger wrote: »

Hopefully anyone evading tax will be nicked and fined shedloads, have days of their time wasted and fail to get through 't pearly gates as and when..


And the other party (seller presumably..??) will know the crook ain't to be trusted, are on the fiddle and will treat them with the greatest suspicion. Expect great difficulties and quite likely fiddling back to you sunshine.. Me, I don't do business if at all possible with crooks, cheats & bigots - if I know that;s what they are...

Old asbestos garage eh?? Blimey, health hazard according to many...


Cheers!

Artful

Wow, I genuinely thought this community was better than that.
I guess trolls prosper everywhere.

Thanks to pararct and G_M for helpful advice.

hcb42

It might have been harsh but was mostly true.

It might be ok for a few £££ for carpets/curtains and freestanding washer, fridge, etc but not £5K....! (not for the majority of houses anyway)

DVardysShadow

theartfullodger wrote: »

Hopefully anyone evading tax will be nicked and fined shedloads, have days of their time wasted and fail to get through 't pearly gates as and when.

I would go with that if stamp duty were revised so that you pay 3% on the price above £250,000 rather than 3% on £250,000 but only 1% on £249,999.

It is the silly application of thresholds which causes a strong motivation to play games with fixtures and fittings.

TehJumpingJawa

DVardysShadow wrote: »

I would go with that if stamp duty were revised so that you pay 3% on the price above £250,000 rather than 3% on £250,000.01 but only 1% on £250,000.

It is the silly application of thresholds which causes a strong motivation to play games with fixtures and fittings.

Fixed.

It's even more ridiculous for 1st time buyers; jumping from £0 to £7500 tax when passing over the £250,000 threshold.

and yes, that is precisely the motivation for my query.

Initial offer £125,000. (obtained written acceptance)
Gazumpted (oh to live by Scottish law, or even American law....)
Offer raised to £130,000

£5000 increase in offer price turns into a £6300 increase due to Tax liability.

It boggles the mind that house buying & selling is ruled by such antiquated broken laws & taxes that punish an honest buyer two-fold.

sonastin

Best way to look at it is would you pay someone else that much for the stuff? i.e. if the house was sold empty and the next door neighbour offered to sell you a load of fixtures and fittings and install them into the house before you moved in, would you pay the neighbour £5k for the items in question? If you would, its a fair price for the goods and not a tax fiddle. If you wouldn't and the only reason you're willing to give the vendor so much is to reduce the apparent price of the house, you'll have HMRC on your back.

Mrs_pbradley936

It is quite straight forward. Anything that can easily be removed can be classed as a "fixture or fitting". So things like lights, curtains, garden ornaments. Our solicitor did not want to know anything about it so we had a price for the house which he dealt with then a further amount for the fixtures and fittings for which we gave the agent a cheque made payable to the vendor. So we paid £249K for the house and a further amount for an itemised list of fixtures and fittings such as lights, curtain poles and curtains, wall mirrors, carpets. The amount has to be reasonable because I doubt they would over look more than 1 or 2 per cent of the value of the property.

RedwoodBrook

theartfullodger wrote: »

Hopefully anyone evading tax will be nicked and fined shedloads, have days of their time wasted and fail to get through 't pearly gates as and when..


And the other party (seller presumably..??) will know the crook ain't to be trusted, are on the fiddle and will treat them with the greatest suspicion. Expect great difficulties and quite likely fiddling back to you sunshine.. Me, I don't do business if at all possible with crooks, cheats & bigots - if I know that;s what they are...

Old asbestos garage eh?? Blimey, health hazard according to many...


Cheers!

Artful

So you're an !!!!!! to everyone huh? Glad you're not my landlord!

I'm glad this thread has come to light as it bears some relevance to the house Ive just 'purchased'. The previous owner passed away and it has been sold to us as she left it - full of her worldly possessions. Given that what we have 'paid' is just above a threshold, I might ask my solicitor to look into this.