Contract Purchase Price - Solicitors Messing About

peter54

I've made a few posts previously about a sale of a property from a estate, of which I am an executor - along with 2 others.

A beneficiary of the estate is buying the property, and it has been agreed that they will pay the asking/market price (£190k) less their share (as a beneficiary). So the amount payable is £166.25k

Solicitors on both sides have previously agreed and written a contract of sale stating this £166.25k as the price payable.

HMRC have confirmed that this "chargeable consideration" of £166.25k is the amount on which stamp duty is charged in SDLT1. And Land Registry have confirmed that £190,000 should be entered in form TR1.

However, one executor has refused to sign the contract with a purchase price of £166.25k. And so I am now being asked to sign a contract with a blank Purchase Price, which will be entered on exchange.

And I have just found out that both solicitors (buyer and seller) have now agreed that £190k will be entered as the Purchase Price in the Contract for reasons of "good practice" and Stamp Duty. And that this means the buyer (according to their solicitor) will now have to pay Stamp Duty on £190k, and not on £166.25k (as HMRC have already confirmed).

This is obviously nonsense. Both solicitors are effectively going against what HMRC have already confirmed.

Who is right?
Should I instruct 'my' solicitor to add a line stating the the "Chargeable Consideration for purposes of Stamp Duty is £166,250", or something on those lines? Will this be sufficient?

Any help much appreciated!

BlueAngelCV

Have HMRC confirmed in writing because to be honest from a lay perspective I agree with the solicitors?

Does the stated price actually make any difference to you? I wouldn't sign a blank contract but I may put in "£190 or £166.25 for purposes of stamp duty or something similar".

What does your solicitor say?

Make sure you get any advice in writing because you don't want to be found to be trying to cheat the system (not that you are but you want to make if clear you are not).

PasturesNew

I'd have thought SD on £166k's correct because SD's due on the value being transferred, which is £166k. The beneficiary already owns the rest, therefore that's not being transferred.

peter54

No HMRC confirmed this over the phone. However they gave a contact phone number for solicitors to confirm this. Both solicitors are aware of this and are free to call this number and confirm with HMRC.

To be honest, 'my' solicitor seems to 'have the ear' of the other executor (that refused to sign the 1st contract). And they have repeatedly made crucial decisions with this executor without the consent of me or the remaining executor - despite instructions to keep us in the loop - which have already delayed the sale by around 4-5 months, and unnecessarily increased costs to the buyer and estate.

I've only just found out that £190k is to be entered in the Contract. So will call my solicitor tomorrow. Just posting to find out my options beforehand, as he appears to be selective with his advice.

DVardysShadow

Technically, he is buying the house from the estate for £190k and using his share of the proceeds to pay 1/8 of the price.

The other way to do this [talking off the top of my head] is to give the house from the estate to all the benficiaries as tenants in common. And for the one beneficiary to buy the others' shares, in which case the transaction is for £166,250.