Stamp Duty Avoidance

[Squiggsy]

Can't you agree to purchase for asking price (assuming you can get mortgage ok) but make it a condition of purchase / contract that the seller pays the stamp duty?

Seller gets net amount of money he wants

You don't have to pay lump (but have slightly higher mortgage)

Inland Revenue get their money.

Nothing illegal there, is there?

 

[Moshe Gariani]

thanks very much for that recent, firsthand experience XooX... (NSC comes up trumps again...)

I am really shocked that you couldn't manage something in that situation... what would the revenue/solicitors have actually allowed for F&F? (did they talk about "F&F" and/or did they talk about "chattels"...?)

we certainly wouldn't want to do anything blatantly illegal (literally a brown envelope stuffed with cash...!) and if the revenue are being that harsh then it doesn't seem there is a middle ground...

out of interest, in terms of likelihood of detection by the revenue does anyone know if it would make much difference if the secondary transaction ("furniture buying") were conducted in cash or by bank transfer...?

 

[Redhead]

by pass estate agents . . .they are all w~* kers

I'm sorry to hear that, we all speak very highly of you.

 

[Arthritic Toe]

I have just bought a house for £255k which was the lowest I could get the seller to accept despite every attempt to make her see it from our perspective i.e 3% stamp duty on the WHOLE sale price instead of 1% if she had accepted £250k. We tried every trick in the book to avoid or offset the extra stamp duty but both solicitors and the Inland Revenue were having none of it!
...
...

Well I guess the reason they hung on for £255k was because they figured you would pay it - and they were right!

 

[Collar Feeler]

If you had the shite neighbours I've got and were getting the bargain i'm getting (the identical house next door sold for £280,000 a few weeks later!) then I would have gladly offered her up to £265,000, so whilst I wanted it for the cheapset price i could get and without the added stamp duty I'm still happy with the deal I've got and will soon be rid of the pikies next door (that's to them not you!)

Moshe, With regards to fixtures & fittings and chattels we tried every combination but once the solicitors know what you want to achieve they cover their own arses by contacting the Inland Revenue to ask them for their 'consideration'. Basically, once our solicitors knew we wanted to buy for £250k but allow for £5k to avoid the stamp duty then we were effectively screwed!

I can't see any way the revenue would become aware of a bank transfer or similar transaction ( I'm no expert and may be wrong on that count though) but you have to ask yourself is the risk and benefit to you worth it for the sake of a couple of extra grand on your mortgage or six more months paying it off?

Also it depends on how much you like the house you want to buy and how desperate you are to move. If you like the house and want it then buy it because if you don't someone else will regardless of the stamp duty they have to pay. I realised that and figured that in the long term the value of the house would increase many times more then the extra stamp duty I'm paying.

As to Estate Agents, I have to say mine has been spot on and excellent. He has sorted all sorts of things out that I haven't had the time or inclination to do and provided a first class service. Les at Dean & Co, Hangleton, top bloke!

 

[Arthritic Toe]

If you had the shite neighbours I've got and were getting the bargain i'm getting (the identical house next door sold for £280,000 a few weeks later!) then I would have gladly offered her up to £265,000, so whilst I wanted it for the cheapset price i could get and without the added stamp duty I'm still happy with the deal I've got and will soon be rid of the pikies next door (that's to them not you!)

Fair enoughski. Then well done on getting a bargain.

 

[Collar Feeler]

Fair enoughski. Then well done on getting a bargain.

Still haven't exchanged contracts so I'll hold on the for now! But will be going for it with many many when i get away from my current house.

 

[glasfryn]

we did'nt pay any at all ...........................................................................................
but then we did move to a deprived area in wales ...................
sunny, green,rural and everything is cheaper compared with brighton.
but I do miss the albion being close.


sod falmer can't they move to south-west wales..lol.

 

[Norman Baker suck my lozenge]

Mrs G and I are in the process of moving house...

We have seen a house we like priced at £269,950

I'm going to offer £250,000 as an opening bid, but if the seller wants a bit more than that (as he probably will - up to £265,000...?) - what is the best way of avoiding the SD? anyone got recent personal experience?

over to the NSC financiers

I'm afraid you have to be a champagne swilling,shirtlifting,socialist to avoid stamp duty.

 

[seagullsovergrimsby]

I can't see any way the revenue would become aware of a bank transfer or similar transaction [/B]

Customs & Revenue can check out your bank/building society accounts on a whim. They are keen to identify any money laundering activity or something that avoids paying tax. Buying a property on the 1% stamp duty threshold of £250k when similar in the area have sold for more maybe suspicious to them. It aint worth it because once your on their files they will screw you for every penny they can get.

 

[Shropshire Seagull]

Okay, here's my twopeneth.

Penny one:
I work for the IT supplier to HM Revenue & Customs (Capgemini) and have systems knowledge of IT system that check for compliance - yes they can check your bank accounts, well all you financial affairs actually and not just in the UK so BB is watching. That said, we have a risk-rules engine which is basically a configurable set of parameters to focus on "high risk" compliance failures. The Revenue only have a finite number of investigators and so can't chase every breach - they use the risk engine to identify where the bigest yeilds in tax loss can be recouped - believe me £5k of stamp duty is small fry - BUT the risk remains.

Penny two:
I sold my place in Burgess Hill 2 years ago and was asking £265k with the estate agent - we accepted £249,999 and the estate agent took an additiona "deposit" cheque from the buyers for £11k when we exchanged - when we completed, the estate agents gave us the £11k - both parties were happy to trust the agent - the solicitor was unaware - as I said, this was a couple of years back and things may well have tightened up now.

 

[timbha]

for the sake of a few grand will you want to be looking over your shoulder for the next six or seven years and won't this tarnish the enjoyment of getting a new place?

Don't underestimate the HMRC (ex Inland Revenue) - it's now run as a business and will collect every penny it can. Staff are targeted and incentivised to maximise revenue collection.

Try to negotiate the price down but don't ask your solicitor to assist in anything illegal - there's little in it for them except censure from the Law Society et al.

 

[moggy]

Okay, here's my twopeneth.

Penny one:
I work for the IT supplier to HM Revenue & Customs (Capgemini) and have systems knowledge of IT system that check for compliance - yes they can check your bank accounts, well all you financial affairs actually and not just in the UK so BB is watching. That said, we have a risk-rules engine which is basically a configurable set of parameters to focus on "high risk" compliance failures. The Revenue only have a finite number of investigators and so can't chase every breach - they use the risk engine to identify where the bigest yeilds in tax loss can be recouped - believe me £5k of stamp duty is small fry - BUT the risk remains.

Penny two:
I sold my place in Burgess Hill 2 years ago and was asking £265k with the estate agent - we accepted £249,999 and the estate agent took an additiona "deposit" cheque from the buyers for £11k when we exchanged - when we completed, the estate agents gave us the £11k - both parties were happy to trust the agent - the solicitor was unaware - as I said, this was a couple of years back and things may well have tightened up now.

good idea if you can get an estate agent both parties can trust.
and temp him with an offer of 1k for his trouble