CRippling Stamp Duty

Any ideas?

A house I want was on sale for 275,000 and was reduced to 260,00 for a fast deal but it is still over my absolute top price of 250,000. I am already exchanged on my sale so in a good position and offered 250,000 but the owner has said his absolute bottom line is 255,000. So I thinks can I nudge up my figure by 5,000 until my solicitor pointed out that the stamp duty will be 3% not 1%.

This means I am not just looking at 5,000 more but 7650 more.

Can I not just give the seller the 5,000 in cash direct or through a third party stake holder or is there any other way I can do this.

Phil

Reply to
Phil
Loading thread data ...

Not legally! Even if you do a deal for carpets etc. the Inland Revenue look VERY closely at deals close to the margin like this.

Reply to
Peter Crosland

You are allowed up to 10k for fixtures and fittings. Get the evendor to list everything in minute detail (including Sheds, garden furniture etc). Try and get it to the magic 10k so it doesn't look too suspicious!

Reply to
Pet Lover

I think you'll find 1.03*£255k - 1.01*£250k is £10,015, not £7650.

Reply to
Ronald Raygun

Like to supply the web link where it states the 10K limit?

Reply to
Peter Crosland

Even worse than I thought so more need to find way round it!!!!!

I popped into the estate agents since my first post and they just say nothing you can do and I asked about the 10,000 allowance on furnishings, garden shed, etc butthey were adamant there is no such allowance.

Phil

Reply to
Phil

"Ronald Raygun" wrote

Who should go back to school? ;-) I think you'll find it's actually 10,150 !!

Reply to
Tim

That's what I said! Then the gremlins got in and grabled it up. I must get myself a new keyboard. It keeps making me mis-spell "because" as "becasue" as well.

I wonder how long before some bright spark invents a spell-checker for numbers.

Reply to
Ronald Raygun

Bitstring , from the wonderful person Phil said

There is no 'allowance' as such, but if you negotiate with the vendors (245k for the house, 10k for the fixtures and fittings) and if the latter number doesn't offend the taxman, your bill will be lower and the vendor will be no worse off.

Reply to
GSV Three Minds in a Can

"GSV Three Minds in a Can" wrote

^^^^^

Note carefully that "fixtures" *are* chargeable to Stamp Duty Land Tax :-

formatting link
Only 'chattels or moveables' (ie "fittings") are *not* chargeable ...

Reply to
Tim

Thanks for this link an extract from which I have copied in below my posting.

This looks like chattels or movables are exempt but I wonder to what amount would be accepted. I wonder whether I should call the Inland Revenue and just ask them - but will they be helpful. Chattels or movables seems a minefield i.e. is a carpet a chattel or fixture.

Phil

Q1) Do I include the payment for fixtures & fittings with the purchase price on my SDLT 1?

A1) Where a purchaser agrees to buy a property for a price that includes an amount properly attributed to 'chattels or moveables', that amount will not be chargeable to Stamp Duty Land Tax & as such should not be included in Box

10 on the SDLT 1.

But, 'fixtures' are regarded in effect as being part of the land, thus are chargeable to Stamp Duty Land Tax and as such should be included in Box 10 on the SDLT 1. 'Fixtures' are items which are attached to the land or building transferred with the intention of benefiting the use of that land or building.

Reply to
Phil

Just remember that what you are attempting is tax evasion and if you get caught then it is likely to cost you twice the tax evaded.

Reply to
Peter Crosland

"Peter Crosland" wrote

How on earth is *correctly* applying the inland revenue's own rules, "evasion"?? :-(

Properly applying the rules for fixtures (chargeable) and fittings (exempt) cannot, in any way, be construed as evasion - just as not paying income tax on your personal allowance is also not tax evasion!

Reply to
Tim

"Phil" wrote

I think the big point is the justification, in a reasonable (true) value for the items concerned. If chattels&movables were truly worth, say, 20,000 (eg they may be brand new & receipts may be available!) - then the IR could hardly argue - and note the mystical "10K limit" doesn't apply.

On the other hand, if they were truly only worth, say, 2000 but you tried to claim that they were worth 5000 (figure cunningly chosen below the mythical 10K figure!) - then the IR would rightly have cause to come after you for SDLT on the excess 3000.

Just make sure you can justify the figure you choose!

Reply to
Tim

That was what my solicitor told me, anything above 10k arouses suspicion

Reply to
Pet Lover

Thank you. Just your solicitor's opinion then rather than a firm figure. Other's may have other opinions.

Reply to
Peter Crosland

BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.