£250k house plus fixtures and fittings. Advice please.

Mallotum_X

Their inability to afford the move is not your problem.

Make your offer and leave it at that. But expect them to want to take everything with them when they go so make sure the offer specifies that these things (if you want them) are included in the 250k bid. leave it on the table but start looking elsewhere.

ought

That is an interesting idea. I could pay £261k, and contractually have them pay the stamp duty.

Is that legal then, or not?

Rockporkchop

Apologies, I deleted the message as it actually doesn't make sense on a property on that stamp duty threshold as if you paid £261k you would still be massively overpaying for the house.

You could offer £250k plus their estate agent's fees. That has been done a lot on this site and is legal.

ought

It does make sense, we effectively pay about £253k (before tax) and they get £253.1k. Plus the home has a greater historical value when we come to sell.

I can live with that.

ought

You are right. Stupid sums. Makes no sense.

Yorkie1

Rockporkchop wrote: »

Apologies, I deleted the message as it actually doesn't make sense on a property on that stamp duty threshold as if you paid £261k you would still be massively overpaying for the house.

You could offer £250k plus their estate agent's fees. That has been done a lot on this site and is legal.

Whilst not illegal, it would still count towards the SDLT valuation:

http://www.hmrc.gov.uk/sdlt/intro/basics.htm#3

Fire_Fox

Rockporkchop wrote: »

You could offer £250k plus their estate agent's fees. That has been done a lot on this site and is legal.

"That said, a strong implication at a tribunal does not mean that HM Revenue & Customs would take the same view. HMRC told me that however payment is made, paying the seller's estate agent fees means there is a "transfer of economic value from buyer to the seller" and this counts as part of the total amount of the transaction when calculating stamp duty."
http://www.guardian.co.uk/money/2009/jul/01/stamp-duty-avoidance


"Conveyancers have been put on red alert not to become involved in Stamp Duty avoidance schemes – for example, where residential property deals are structured to avoid the tax.

Such schemes could be sophisticated ones, as advertised on the internet, or simpler ones whereby, for example, buyers pay the agent’s fee even where the agent was acting for the seller, so that the property price is brought down below, typically, the £1m threshold.

The warning, from the Solicitors Regulation Authority, comes after HMRC made it known that it is actively scrutinising and challenging all property sales where it looks as though there could have been efforts to mitigate Stamp Duty Land Tax.

If HMRC successfully challenges, buyers could be liable to pay all of the duty, plus interest and a penalty. Solicitors could also face punishment, as if they knowingly provided information in support of a tax return that is incorrect, HMRC could impose a penalty of £3,000 per submission.”
http://www.estateagenttoday.co.uk/news_features/HRC-fires-warning-over-Stamp-Duty-cheating

Rockporkchop

Wow, interesting reading, thanks. I must admit the last time I bought and sold a house was 2008 so I am obviously out of date. I'm so glad I am not moving for the foreseeable, so much dead money involved.

Richard_Webster

If part of the £3000 is for "fixtures" then they are part of the property any way and you will have their price added to the £250,000 to work out the SDLT!

I think there was a case recently where the parties agreed a list of things with specific prices amounting in total to around £3-4K and HMRC chose to challenge some of the items and a court held that £800 worth were fixtures. Price therefore £250,800 and SDLT due was £7,524.

It is only "fittings" and chattels that are exempt provided the price for them is a fair second hand one.

ought

Erk, the vendor is not going to budge. They need more than £250k to make their move.

I am tempted to offer £253k, pay the extra £5k tax, feel like an idiot but not worry about HMRC knocking on my door. There is another house up the road 2 doors on sale at £269k, and has been for a few months so maybe it is ok.