property - is this legal?

[bednobs]

hi have seen a house i want that is 20k over the stamp duty threshold for 3%. They wont come down, but i wondered if it's legal to offer 249999 plus 20k for the furniture as a seperate transaction?

[cathfromsaron]

is it to be sold furnished then?

yes, provided the goods are itemised and valued, and the deal is genuine.

[VHG]

The tax people are aware of this evasion and can act on it if they feel it is being abused. Read this article.

http://www.thisismone...mp-duty-property.html

[bednobs]

it's not really genuine tho cath - we just want a way to get it sold beneath the threshold. The house is being sold with no onward chain, as the owner died and it's being sold for probate by distant relatives. i'm sure they would be willing to sellt he furniture, but as to whether it's worth 20k, i don't know

[Sqad]

bednobs........can't you slip them 20K in cash?

[bednobs]

would love to but who would believe me if nothing in writing ?

[woofgang]

unless you are buying antiques, I can't see the tax office believing you....20k is quite a lot.

[cathfromsaron]

you could buy an 'antique' from him in a 'separate' deal? but don't tell your solicitor! and they will pay less selling fees ...

[DTCwordfan]

Establish a "loan" for £20000.....writeable down by the tax-permitted gift each year, your money put on an escrow account for them.....

[chrissa1]

This has been going on for years. When we were looking for our last house 22 years ago our solicitor told us about doing exactly that. In the end we didn't buy the house.

[Sqad]

bednobs although it is is illgal it is done all the time in Spain and is called "Black Money" It is suggested by and handled by, your solicitor.

[NoMercy]

I like Sqad's idea. Tres Spanish... ;-)

[Eve]

If you are getting a mortgage, would it affect the figures on your required loan to value and their lending criteria?

This is likely to be classed as a transaction at an undervalue and disclosable to your lender - your solicitor would be under a duty to do this as they usually act for both you and the lender so a conflict of interests arises otherwise. It may also be disclosable on the stamp duty forms which go to the Inland Revenue, I haven't filled one in for a while so can't tell you for definite.

The legal profession are rightly very heavily policed and regulated to avoid things like tax evasion, mortgage fraud and money laundering which are common problems in the property market.

[Buenchico]

HMRC are of the opinion that it's NOT legal:
http://www.bbc.co.uk/news/business-15479321