Stamp Duty Calculation

iwilldoitthistime

Hi

Sorry if this is a stupid question -

How is stamp duty calculated? Ive read on other threads that its on the value of the property, not the amount it is sold for? Is this right? If so, who determines the value?

thanks

Generali

It's payable on the value of the house. Normally that's the price paid. Exceptions would be if someone sold a house to you for blatantly less than market value or transfered all or some of a house to you for nothing.

plane_boy2000

As above - the value is the price you are paying / selling at as in theory that should be the market value.

You used to be able to claim that certain items were fixtures rather than the property - this could be used if you were close to the threshold, but they have tightened up on this so you cant really get away with any more than a couple of grand.

They also check up on sale prices to, so if you decided to sell your house to someone for less than the value of other houses in the same road then they may catch on to you.

Romani_Ite_Domum

If you use Excel, copy and paste this into cell A2 and enter the purchase price in cell A1.

=IF(A1<125001,0,IF(A1<250001,A1*0.01,IF(A1<500001,A1*0.03,IF(A1>500000,A1*0.04,0))))

iwilldoitthistime

Thanks for the replies.

If nothing in my street has sold for quite a while and the last sale was under the threshold (with a comparable house), how would they decide the actual value?

I question because I have a private buyer for my home who has asked if we would accept £124k for the house and £16k for the fittings in cash!

I wasnt sure what to say to this!

Generali

If I was the buyer I'd try to do this and then refuse to pay the £16k at the last minute. If I was sure that the seller wouldn't break my legs that is.

If the house is worth £140k, why not just sell it to someone who can afford to pay the stamp?

Doozergirl

They would risk giving you £16,000 in cash for the sake of £1400 in SDLT which they could still be caught for not paying?

It would be very unwise of you to accept such an offer. You do not know these people and as it is an illegal deal, there's nothing to back you up if they don't produce that money.

m00m00

if you are actually selling (listed price) at 139k, then a 124k offer would not be completely out of the question for a cash buyer/quick sale, especially in a flat or declining market, so I would think you'd be about as safe as could reasonably be expected in any sort of tax evasion.

iwilldoitthistime

again - thanks for the replies.

I thought it was dodgy - just thought Id check it out with 'you who know so much about these things!'

I will let him know we wont do this - as you say, he wouldnt gain that much by this anyway, so why do it??

Thanks again

chief518

for future searchers: Inland Revenue SD calculator

http://sdcalculator.inlandrevenue.gov.uk/

diddlydum

You wouldn't be the one who was depriving HMRC of revenue, so you should be OK, but if you don't put the fixtures on the contract you have no legal rights to that money. And if you do put the fixtures on the contract a) your/their conveyancer won't sign off the deal and b) HMRC would smell a rat a million miles away.

Generally HMRC will take the sale value as the actual value of the property, but if there is collusion in having an inflated price for the fixtures then there will be problems.