Fixtures and fittings stamp duty loophole.

Davidr0wl4nd

Thrugelmir wrote: »

Are the fixtures and fittings as you describe your property or those of the tenant?

The price you pay determines stamp duty not the market valuation.

The fixtures and fittings would be classed as mine as part of the sale, however the large fridges etc are the convenience stores but I thought all tenants 'chattels' could be included even if they are not yours. I thought I read that on hrmc website help page for stamp duty.? What do you think ?

GDB2222

Davidr0wl4nd wrote: »

The fixtures and fittings would be classed as mine as part of the sale, however the large fridges etc are the convenience stores but I thought all tenants 'chattels' could be included even if they are not yours. I thought I read that on hrmc website help page for stamp duty.? What do you think ?

Well you'd better quote what they say, because it looks like wishful thinking.

JQ.

Davidr0wl4nd wrote: »

I own a limited company and have just bought a commercial property with a sitting tenant who has a lease for the next 8 years I an to keep them in and just rent the property to them. They are a national convenience store chain and pay 18500 per annum, so it seems a good investment. Additional to that their ate two flats above the shop which again are both currently tenanted they bring an income of 399 PCM. Bringing the total income to 28k per annum. Problem is I have paid more than the property is worth 255k not realising I would qualify to pay stamp duty !!! I want to know if I can apportion done of the sale to goodwill because of my sitting tenant and the long lease they have. Or could I argue gown the fixtures and fittings route. They have plush fittings I.e display stand display freezers, fridges etc... The property vacant would cost 160k which I can prove as next door is vacant and for sale. Please help

Goodwill - no such thing for a Landlord. The tenant may have goodwill from the operation of their business, but that has nothing to do with you.

The difference between £160k and £255k has nothing to do with the fittings, it's because you have 8 years income to a secure tenant and that is why you have paid a premium.

Davidr0wl4nd wrote: »

The fixtures and fittings would be classed as mine as part of the sale, however the large fridges etc are the convenience stores but I thought all tenants 'chattels' could be included even if they are not yours. I thought I read that on hrmc website help page for stamp duty.? What do you think ?

Retail units are generally let on a shell basis - everything in the shop will belong to the tenant including all the fixtures and fittings. It will be their responsibility to return it to shell condition when the lease expires. So you won't be able to make any claims on anything in the shop.

Davidr0wl4nd

Ok one last question it was up for auction and never sold but then I bought it after still under auction rules I have only paid 5k deposit do u think I should ask vendor if he will drop price to 250k. As I font think I can afford the stamp duty ????? I'm in a right pickle lol

Yorkie1

I'm pretty sure if it was sold under auction rules then there is no scope for negotiation, although you can always try.

JQ.

If you've bought at auction then there is no room for negotiation on fixtures and fittings anyway, so this discussion was pretty irrelevant.

If you've paid a deposit then the time to negotiate is over, you have entered into a contract to purchase - you exchanged when you paid the deposit. No harm in having a go, but I've no doubt the auction house will tell you that if you don't complete they'll come after you for the shortfall.

I assume you have your finances in place already? Commercial property finance is pretty hard to come by these days and it takes considerably longer to go through credit than it used to. The banks are pretty picky these days and 8 years unexpired term does not look as attractive as it used to.

Davidr0wl4nd

Yes finances are in place but hadn't budgeted for the stamp duty as I thought because the shop which is two units and two flats wouldnt be treated as one unit I just hope I can work something out because I don't think I can afford the stamp duty

JQ.

Nope, you can't split it. Maybe go and see a specialist tax consultant but I can't think of any way out of it. That's why everyone would have stopped bidding at £250,000, which was probably the reserve.

You couldn't have got finance for the stamp anyway as tax is not factored into property finance - it's your responsibility to have that money available in cash.

Ultimately you need to find the money. You are contractually bound to complete and stamp duty will be payable on the transaction. And don't forget, should you fail to complete I suspect you'll be liable for at least 10% of the purchase price, plus any losses the vendor makes when they eventually sell. I'm actually surprised the auctioneers allowed you to only give them a 2% deposit.

Can't you just get a personal loan for the stamp?

Davidr0wl4nd

Will have just feel so daft for rushing into it would the 7500 in stamp just come off the company's corporation tax bill ?

Richard_Webster

the stamp duty jump between £249,999 and £250,000 is extremely unfair,

£1 jump - that's unfair? People will get this wrong and get into all this 999 business. It is unnecessary.

SDLT on £249,999 is £2,499
SDLT on £250,000 is £2,500

3% applies over £250,000.

I think they would have to be some pretty special white goods, hi fi equipment etc etc to be worth £5K secondhand.