gareth123

I'm selling a house for 265K. Obviously the buyer is keen to pay 249,999 so he can avoid the 2% hike in stamp duty that occurs at 250K, obviously I want my full 265K I can see his point - a 8K tax on buying your home is an insult.

Suggestions as a way around this? Legal ways? My first thought is to sell the house for 249K and include 15K of fixtures and fittings (all the applicances and carpets and curtains and stuff are staying there) - can I do this? It seems too obvious.

Thanks in advance.

Rab

Get their solicitor to put in an offer of £249K for the house and the extra on fitings and fixtures. I think you will have to list what they are though. Recently sold a house and this is how it was played. No probs and all legit

Reffro

Be warned, just this sort of thing was highlighted in the budget, and was going to receive closer scrutiny from the tax grabbing barstewards....

Fatman

OK, so sell the house for a quid less than 250k and also sell some random piece of furniture a week before completion for face value plus 15k.

robski

As part of the house purchase contract sell him something totally non related to the house for 16K. I.e. the second contract is totally dependant on the 1st contract.

What about that packet of **** he really wanted you to sell him? £16k sound fair?

As long as he doesnt need to mortgage at a percentage of purchase price and the fact that hes borrowing say 200K against a purchase price of £249K doesnt matter there cant be a problem.

Sale of fixtures and fittings will attract a reasonableness review (potentially) so £50k or fixtures and fittings in a £50k house, dodgy. £50 in a £500K house must be reasonable.

robski

Tiggs

you would be well advised to talk to your solicitor rather than take advice from here- what you are doing is "wrong". Not making a moral point just saying that while you can get away with it (and should be fine at the levels you speak about) you are still breaking enough rules for plenty of solicitors to get the jitters.

i dont think saying "but Big Bob Dump Valve from the net sold his caravan and 2million pound of carpets to Ernie Neon Kit...." will get you far with a solicitor that has had problems on this point in the past.

T

gareth123

Tiggs - understood.

I am merely trying to gauge if this is taking the **** as far as the taxman is concerned. 15K of fixtures and fittings on a 250K house sounds reasonable to me, but there has to be a point where it stops being reasonable in the taxman's eyes.

Thanks for the replies so far. Has anyone actually come unstuck doing this? I can't see any property ever actually being 'sold' for 250-275K, always 249.999 + extras, if this is so easy.

Wurzel

iTrader: (1)

sell him the house for 249k and get him to buy you a new car for the outstanding amount surely there is no problem with that.

Toerag

Estate agent told me the other day that the standard over here for 'personalty' (carpets, decor etc.) is around 7% of the value, so your £265k total could include £18.5k of fixtures & fittings.

PPPMAT

I have done this on commercial properties before (I'm an agent). I don't do residential but I would think that the principle is the same. Fixtures and fittings are legit. Ask your solicitor for confirmation.

22BUK

Sell him (for 16K) the option to buy the house at 249K. I believe this is totally legitimate unless something's changed recently...

chameleon

Be warned that if the revenue decide there is a problem all parties and their solicitors could be committing an offence

chris singleton

Firstly you can sell for dead on £250,000.00 and still only pay 1% stamp duty, this is the threshold, anything over £250,000.00 attracts 3%.

If you do decide to accept an offer of £250,000.00 with £15,000.00 for fixtures and fittings it would be fraudulent if the apportionments that are made are not properly reconcilable to severable items at the property.

If you can justify £15K's worth then so be it, although this does seem quite a high amount. Carpets and Curtains can take up a couple of thousand but after that you are struggling unless you really are selling a fully furnished house.

Money under the table is definately not advised, are you really going to trust someone you dont know with £15K. You'd basically have to meet just prior to contracts being exchanged, take the money and then authorise your solicitor to proceed to an exchange. Not worth it and again, it's fraudulent.

An option to buy is a very complex matter and not worth the hassle.

The Transfer to the buyer will also have a section to confirm that the transaction does not form part of a series of transactions that will take you over the threshold.

I can understand the frustration with Stamp Duty, I know I'd be reluctant to pay 3% however your best bet is to stay well clear, If the house is worth £265,000.00 wait for someone to make an offer for the full amount or thereabouts.

Let me know if you have any more queries.

Chris

Tiggs

Go round your house and look at fixtures and fittings- add them up!

I bought at 270 last year- there was never more than 6-7k of fixtures and that was pushing it.

We actually lost out on a house at 260k and on that deal the owners had gone round and listed the assets for us to buy at 10k...the house was well fitted out and they included EVERYTHING they were allowed- 9k.

Tiggs

ps- "we did this and we did that" people are as usefull as "i did 140mph and never got seen by police" dont make it right and dont make you immune.

Reffro

Furniture is not included in Fixtures and Fittings, they only include those things basically attached to property, not moveable items. So you are looking at light fittings, built in kitchens, bathroom suites, curtain rails, carpets. Ceratinly not anything that can be picked up or moved without unscrewing it. Anything like furniture is merely the contents of the house as they are not fixed or fitted to the structure of the property, and should not be used in the calculation of what fixtures and fittings are worth.

[Edited by Reffro - 4/24/2003 4:12:11 PM]

gareth123

Well his solicitor baulked at 15K of fixtures and fittings. And I understand this, I don't think there is 15K worth at secondhand values (certainly more than that new though), so I can see the solicitor not wanting to cause a problem.

Meeting the buyer to get cash / him buying me a car / me selling him a packet of cookies for 15K are not really do-able because I'm in California and the house and buyer are in Hampshire - plus I want to keep things legal. Although I wonder if he has a PayPal account...

Basically I'm annoyed with the Inland Revenue. They'd tax breathing if they could.

Hmm.