Fixtures and fittings? Stamp Duty immplications?

[fizz876]

Someone I know has seen a house they like. The EA price is a little over 250K

The sellers are proposing that they would accept 250K but would want a little extra for fixtures and fittings. In the region of 10K I believe. Is this acceptable or what is the maximum threshold for F+F?

[SJobson]

There is no maximum threshold - if the F&Fs are genuinely worth £10k, or £100k even, then you don't have to pay SDLT on them. But you will need some evidence of their value - receipts, or a proper valuation, for instance.

[Bullett]

Does the house value not have to be under £250k so at 250,000 you pay 249,999 you don't?

[scotal]

Bullett said:

Does the house value not have to be under £250k so at 250,000 you pay 249,999 you don't?

£250,001 is the change is SDLt from 1% to 3% unless you are a verfiable FTB.

(so pay exactly £250k for it, the bill will be 1%)

Remember if HMRC take a look at the case and believe the F&F was tax evasion, they will not only make the buyer pay the full 3% due, but also fine them. I have no idea how often this happens.

[Lurking Lawyer]

I'm not a property lawyer but doesn't the conveyancer have to certify the value of the transaction thesedays when filing the relevant SDLT documentation....?

I wouldn't have thought many solicitors would put their own necks on the block and certify it if they had any doubts that it was a tax dodge, knowing very well that the transactions that HMRC are most likely to look at are those just below the band increase where there is abnormally large allowance for F&Fs.....

[skeeterm5]

Dont forget that this may impact the amount of the mortgage they have which is based on the purchase price or valuation which ever is lower.

So whislt they save the 10k they will need more cash to complete the deal.

S

[SJobson]

Lurking Lawyer said:

I'm not a property lawyer but doesn't the conveyancer have to certify the value of the transaction thesedays when filing the relevant SDLT documentation....?

I wouldn't have thought many solicitors would put their own necks on the block and certify it if they had any doubts that it was a tax dodge, knowing very well that the transactions that HMRC are most likely to look at are those just below the band increase where there is abnormally large allowance for F&Fs.....

Not quite true - the person filling in the SDLT return certifies the accuracy, but if you have it signed off by the clients, on their heads be it. It is, after all, a tax return in their name so this is good practice in any case.

Not sure the OP was asking about a tax dodge, however - it appears to be a £250k house plus F&Fs, and the seller is trying to eke as much as possible out of the F&Fs. One thing for the OP to be wary of - if something is permanently affixed to the property it forms part of the property and cannot therefore be valued separately for SDLT purposes. Think kitchen units, built-in cooker, that sort of thing.

[bogwoppit]

HMRC guidelines:
http://www.hmrc.gov.uk/sdlt/transaction/value.htm#...

"The value of the chargeable consideration includes anything paid for assets that form part of the land or property.
These assets can include:
fixtures and fittings, including bathroom and kitchen fittings, but not freestanding furniture, carpets or curtains"

For 10k they'd better be some bloody nice carpets

[fizz876]

Some good replies.


Basically the best course of action is to make sure they are not taking the p1ss with F+F. i.e if they want a few thousand then they had better include some actual stuff like sofas etc to ensure that no one falls foul of HMRC guidlines.

[fizz876]

Some good replies.


Basically the best course of action is to make sure they are not taking the p1ss with F+F. i.e if they want a few thousand then they had better include some actual stuff like sofas etc to ensure that no one falls foul of HMRC guidlines.