House Swap/estate agency fees/stamp duty

RiskAdverse100 · 7 October 2005 at 5:05PM

The following link would suggest that Revenue & Customs require the market values of the properties to be used.

While there is nothing to prevent one person from selling their house to another for any price they want, if an exchange is involved then Customs & Revenue could require you to produce evidence that the values given for the two properties were market values.

http://www.hmrc.gov.uk/manuals/sdltmanual/SDLTM04020.htm

RiskAdverse100

ds3727 · 7 October 2005 at 5:26PM

RiskAdverse100, yes I could see that being a problem if for exapmple paying 50% below the asking price. But paying £250k for an asking price of £299k is a 16% price drop which I thought wasn't too much of a price drop, especially in the current slow market.

RiskAdverse100 · 10 October 2005 at 8:55AM

Maybe not. But if Revenue & Customs decided to investigate this transaction would you be confident of being able to persuade them of this? After all there are two transactions involved, both of which involve a large price reduction which results in a Stamp Duty Land Tax saving. If R&C felt that some tax evasion was going on they would no doubt try and produce details of similar sales to show that the reported transaction prices were not in fact the market values of both properties. They would also require the agents involved to supply details of all the viewings arranged and offers made. If there were lots of viewings for both properties and plenty of offers at around the reported transaction prices then fine. But if there were very few viewings and no offers apart from the ones you each make for the other's property then it is another matter entirely.

RiskAdverse100

MattyNeth · 10 October 2005 at 9:40AM

I would think the key would be the mortgage companies valuer. If the valuer valued the property at 250k then no come back I would imagine

GDB2222 · 10 October 2005 at 10:05AM

There's a question on the SDLT form asking whether there are any related transactions. Clearly, the correct answer in this case would be yes. Answering no would be fraud. If you answer yes, then you can expect the values to be looked at very closely.