How much can we pay for carpets, curtains, oven etc

passingthrough

We're looking at a place that's on at £270k, and we're thinking of offering £250k to avoid 3% stamp duty. However, we think the owners are holding out for something nearer the asking price (it hasn't sold, despite being a really nice house relative to others in the area). This is probably because they've spent a fortune doing it up, and everything in it is new or nearly new (I think there's a genuine reason for sale, and I think it's probably priced about right - we just haven't got the cash once you include 3% stamp duty).

So here's my question: how much can we pay / offer for other stuff that they have (in order to give them something nearer £270k) before the Inland Revenue would think it looked fishy? £5k? £10k? I found something which said you could pay 2nd hand value for:

* carpets (fitted or otherwise)
* curtains and blinds
* free standing furniture
* kitchen white goods
* electric and gas fires (provided that they can be removed by disconnection from the power supply without causing damage to the property)
* light shades and fittings (unless recessed)

...to which I'd add an offer for the freestanding range cooker to try to bump up the total!

Anyone had any experience of this as buyer or a seller?
thanks

kingkano

I was reading some stuff yesterday and Im sure I saw that if the amount comes to over £5k then taxman will be inspecting the itemised listing very very closely. You would be better off talking to a solicitor about this I think. This loophole was apparently tightened fairly extremely in 2003, but not completely closed.

I dont think even all that stuff would add up to £20k lol. (id be interested to see any more expert replies though as we have the same situation which we'd dearly love to see solved).

fingers crossed for wed budget then!

passingthrough

Thanks for an initial steer - and you're right about the £20k, the carpets are nice, but they're not THAT nice! Mind you, the cost of fitted carpets throughout (can't work out why these wouldn't be treated as fixtures and fittings, but whatever), plus new appliances, cooker...all this would certainly cost a few thousand to replace, so we might legitimately get nearer to £260k (ie £10k for 'chattels') as a final total value.

Would be good to hear from anyone else?

Woby_Tide

the point is 2nd hand values are nowhere near that of 'new' items. The 2nd hand values of the entire white goods in a kitchen probably would struggle to reach £500. Unless you're buying a very high spec house I'd say you'd struggle in most cases to even justify £5k for fixtures and fittings, probably even less than that. Also the fact that you are going to offer for the oven say, you offering over the odds will flag it to the taxman, likewise offering a low amount and they won't want to sell, in reality they'd probably want an 'over the odds' offer for it to pout up with the inconvenience of having to buya new one, which then puts you at odds with the taxman. Swings and roundabouts

nollag2006

The Revenue would pull you in for anything approaching even the smaller figures mentioned in your opening post.

I doubt your solictor would let you away with more than £2k on this. What has their advice been to date ?

helping_hubby

I may be totally wrong here (FTB) but when reading through all our documentation I got the impression that furnishings etc sold separately from the house had to be declared and were subject to stamp duty.

Generali

A rule of thumb I try to use with HMRC in all my dealings is this:

If I get caught for whatever dodge or wheeze I happen to get into, how much sympathy will I get from my mates when I moan about it. If I think they'll say 'That's a bit harsh Generali I put that on my tax return, let me get you another' then ok but if I think they'd say something like, 'What were you thinking? The taxman was never going to see you taking Mrs Generali to The Savoy as a legitimate business expense' then I think again.

My feeling is that saying 'I got busted for trying to buy a cooker and a 10 year old carpet for 20 grand' probably falls into the latter category.

More seriously the taxman is not an idiot, sadly. Therefore don't try to treat him like one because the chances are you'll get caught.

nollag2006

Your understanding is correct HH.

What the purchaser here is trying to do is to get under the £250k stamp duty threshold, and then pay them an extra amount for F&F to get closer to the £270k asking price while avoiding the step up in stamp duty.

Quite correctly, IMHO, the Revenue takes a dim view of these tactics, and would come down on them like a ton of bricks

i1189

When we bought our house a couple of years ago, our solicitor said that was a big no-no.

We had only wanted to buy the big American fridge-freezer separately, as the vendors were going to sell this separately from the house anyway, but we weren't allowed to do this - it all had to be included in the purchase.

olly300

The taxman would be suspicious and your own solicitor would want nothing to do with it. I know someone who tried a few years ago so their buyers wouldn't pay extra stamp duty but was warned off by their own solicitor. (Solicitors can get done for fraud as well.)

The property is purposely priced at £270K as an indication that they want offers in the next stamp duty band.

PINGLEIST

Asking a mate who is an employee at a local estate agent comes up with the same answer you have been getting, also you would really struggle to find a solicitor who would allow this to happen.
My advice would be to come clean with the vendors and offer the full asking if they would be willing to pay the stamp duty, you never know they just might pay it all but at worst they should be willing to contrbute..