First Time Buying, Excited!!!

observations_from_a_hill

Bumping in hope some kind & patient person can give OP here an estimate of SDLT liability.

Price agreed is £250,000, plus £1,500 for bathroom fixtures & kitchen units.

I think the fine details may have got lost in all the excitement!

Yorkie1

observations_from_a_hill wrote: »

Bumping in hope some kind & patient person can give OP here an estimate of SDLT liability.

Price agreed is £250,000, plus £1,500 for bathroom fixtures & kitchen units.

I think the fine details may have got lost in all the excitement!

In my view, bathroom fixtures and kitchen units are part of the assets which form part of the property and therefore will be included in the overall total on which stamp duty is calculated.

See HMRC website:

Calculating the amount of the chargeable consideration

The amount of the chargeable consideration includes anything paid for assets that form part of the land or property.
These assets can include:

• buildings and structures that are part of the land, such as farm buildings
• fixtures and fittings, including bathroom and kitchen fittings, but not freestanding furniture, carpets or curtains
• intangible assets, such as the value of goodwill attached to the land

http://www.hmrc.gov.uk/sdlt/calculate/value.htm

Therefore, if this is correct, stamp duty will be payable on £251,500 @ 3%, i.e. £7545.

SolemnSolitary

Yorkie1 wrote: »

In my view, bathroom fixtures and kitchen units are part of the assets which form part of the property and therefore will be included in the overall total on which stamp duty is calculated.

See HMRC website:
[/LIST]
http://www.hmrc.gov.uk/sdlt/calculate/value.htm

Therefore, if this is correct, stamp duty will be payable on £251,500 @ 3%, i.e. £7545.

This is not what I am being told by my lawyers..... We would never have agreed to 1.5 on fixtures and fittings if it would have cost us an extra 5k in taxes! Who in their right mind would do this? Could build a new kitchen for less than that...

So I am not sure this right

SolemnSolitary

We have Contacted CountryWide and requested a pricing list of everything.

I have also got the list of fixtures and fittings we recieved







We are only paying 1500 for all the carpets curtains pot plants i guess?

The DishWasher and Stove are both Fitted as well as a Wine Fridge.


We are getting really nervous now, as we aren't trying to evade tax... We have no intention on goind over 250 000. The only reason we agreed to paying Fixtures and fittings was because at the time the Estate Agent was talking about the Vendor taking things out of the house. Like the Fitted Dishwasher, etc.

SternMusik

SolemnSolitary wrote: »

We have Contacted CountryWide and requested a pricing list of everything.

I have also got the list of fixtures and fittings we recieved

We are only paying 1500 for all the carpets curtains pot plants i guess?

The DishWasher and Stove are both Fitted as well as a Wine Fridge.


We are getting really nervous now, as we aren't trying to evade tax... We have no intention on goind over 250 000. The only reason we agreed to paying Fixtures and fittings was because at the time the Estate Agent was talking about the Vendor taking things out of the house. Like the Fitted Dishwasher, etc.

Everything marked with a tick on the F&F list is included in the sale price of the property (your original offer of 250k). The plant pots etc have "N/A" next to them which means there aren't any/they are not for sale. If you want any of the items marked "x" you would have to negotiate a price for them, bearing in mind that they are second hand items, and presumably won't be of much use to the seller in their next property. I doubt they could even be removed without causing damage.

What did the property particulars say about the fitted wardrobes and shelves? These things are normally considered part of the fabric of the building and thus included in the sale price. I would stick to your guns and not offer anything above the agreed sale price. It is not worth getting into trouble with HMRC over it. Your vendors are trying it on IMO.

silk_2

But we already agreed to buy based on those terms (hi btw, I'm buyer #2). The EA made it sound like common practice i.e. when a house is just over stamp for the vendor to try and sell things separately. The vendor made a big point about the carpets and curtains being luxury/expensive ones as well.

Originally the vendor was trying to ask 5k over, then 2.5k over, both of which I flat out refused. I offered 1.5 because I felt it would close the sale (it did) and also because I felt her carpets, blinds and curtains should be worth at least that - she might not have left them otherwise.

The bigger worry I have now is that our solicitors don't seem to have a clue about any of this, they said it isn't normal to get a list with values listed.. but that they would ask anyway. Surely they of all people should know we're buying certain things separately and they should be able to assure us that it will all be handled correctly / legally?

All of the paperwork we've seen coming to and fro with our solicitors has clearly stated the house is selling for 250k. In fact I don't recall seeing any documentation about the extra 1.5k at all, certainly nothing that we've signed.

Are we being pulled into something dodgy? We really want this house and have already spent a fair bit on searches etc. If we now refuse the 1.5k would it break the whole deal?

SternMusik

The problem is that unless you pay market value (second hand) for the items in question, and those items are removable fittings which can be taken away without causing damage to the house, you are committing tax fraud (at least that's how I understand it). HMRC apparently now scrutinise cases at the stamp duty threshold where F&F have been paid separately.

You are committed buyers who have already incurred costs. It would be stupid of your vendors to pull out of the transaction. No buyer is likely to pay over £250k for their house, and any buyer will have the same problem with regards to tax fraud.

You could get back to them (via solicitor) and say that you have taken some advice on your tax liability and are now unable to offer for the items marked "x". (That would be the fitted wardrobes; the carpets and curtains are marked as included in the sale price on the list.) My bet is that they back down.

Also, speak to your solicitor again and see what they say. Explain exactly what items you were going to pay 1.5k for, in light of the F&F list. It is their job to advise you but you have to ask the questions.

silk_2

I'm not sure where fraud comes into it, she was genuinely wanting to sell the (fairly new) carpets and curtains to us as a separate transaction, and we eventually agreed on a price. I didn't want to have to spend like 2 grand when I moved in on getting blinds, curtains and floors sorted.

SternMusik

silk wrote: »

I'm not sure where fraud comes into it, she was genuinely wanting to sell the (fairly new) carpets and curtains to us as a separate transaction, and we eventually agreed on a price. I didn't want to have to spend like 2 grand when I moved in on getting blinds, curtains and floors sorted.

Fraud only comes into play if you pay £2k for carpets and curtains worth £500, which means that you are paying an extra £1.5k for the house, and stamp duty ought to be paid on £251.5k.

There is nothing wrong with wanting to buy her carpets and curtains. Although sellers rarely take their fitted carpets and blinds with them as they are unlikely to fit their new house. The money you pay for them should reflect age and condition.

Also, if you choose to buy the carpets and curtains separately, make sure that the F&F list correctly reflects the fact, and also that the prices you pay and condition of the items are noted in the paperwork somewhere. At the moment, the F&F list indicates that carpets and curtains are included in the £250k, so no doubt HMRC would take a dim view of any attempt to pay extra for the property without paying the higher stamp duty. Of course HMRC may not scrutinise your transaction and you may get away with it anyway.

silk_2

Just spoke to solicitors and they'll call back tomorrow for us to go through it all properly. They will make sure we can legally get 1.5k worth of goods and that they'll all be itemized - and if not offer less or nothing.