or should I say is house buyer being unreasonable? Scottish lawyer input especially welcome

[housenearlysold]

accepted an offer of £270K on our house.HURRAH!

Now at stage of lawyers batting back and forth tweaking the details.

We are in Scotland.

Latest lawyers correspondance from buyer asks that of the agreed £270 , £250K is apportioned to the actual house and £20K to moveables I think they call it, ie furniture and stuff

We have in in fact agreed to include most of our old furniture in the price of £270 but it is a stretch to value it at £20k!

the buyer is presumeably doing this to avoid hike in STAMP DUTY which is 1% if price is up to £250k and jumps to 3% at anything above.

However they phrase it they pay us £270K as agreed.

Is this ok?
If the powers that be consider this dodgy will it come back on us or on the seller or both?

Our last buyers did this we were advised fine. Common ploy around stamp duty level, in fact commonly used to reduce stamp duty full stop. I would presume as long as figures are vaugely in the region and 20K for fixtures, fittings, etc. is I would think reasonable - presuming you are leaving some such things - then HMRC would be okay with it. Why don't you ask your conveyancing solictor to advise?

Sorry just reread bit about furniture and things - doh.

Thing is, the powers that be are well aware of these tricks and might just check up on it. Ask your solicitor what you should do. Don't do it if you're uncomfortable (or if you might lose your sale).

gomez thank you so much for prompt reply.

Will not be able to speak to solicitor till morning but cant sleep thinking abou this!

I did wonder whether the £20k for fixtures fittings furniture might be considered income TO ME, IE I would be liable to pay tax on it?
Whereas if it was included in house total I would not?

lyra i fear it is more likely if I DONT agree to it I might lose sale

On our last house we were looking around the 250-270k mark. Our solicitor told us that we could offer £249999 and then anything up to 3 or 4k for fixtures and fittings to avoid stamp duty. He seemed to think we would not get away with anything more than that. In the end we bid £267 for the house so never actually went down that route, we are in Edinburgh.

thanks rosyfour.

So why the heck are the buyers' solicitors suggesting this?

Thats what I was thinking too, it seems a bit mad. Its not Remaxx is it?

1. You won't be liable to tax on personal stuff like this

2. You can probably go through hoops to justify a 20k price tag if you want (eg adds in the cost of the turf on your front lawn, cost of every hedge in your garden and so on)

3. I thought that in Scotland once an offer has been accepted then that's it? If you refuse I don't think they can back out?

I can see why they want to do it, and I might have tried to negotiate that into the offer on the house in the first place, but it is a bit late in the day for this to be pulled out of the hat. Saying that, I think that if the HMRC came down on this then it would probably be them that get the flack and not you, so there is probably no real downside for you in agreeing to this?

Time for your solicitor to earn his money. He is paid to advise you on all aspects pertaining to the sale, so get him to advise you. You definately don't want to lost the buyer so get the solicitor to explain all the possible implications to you.

thank you all.
No, not remax, squiffy. I have just spoken to our lawyer.Glsd to hear we wont be taxed on this stuff if we agree.

He is a little concerned because he says the amount people put on these things is usually about 5 thousand at the most and that it would be flagged up by inland revenue.

he also says that the buyer AND the seller would be queried about it, because we agreed to it (if we did if you see what I mean)

He is going to phone the buyers' lawyer to discuss it.

Any further input greatly appreciated.

I almost did this on a house in england (but think same rules apply re HMRC. We had originaly offered 500k, but got pushed up to 520 and agents/solicitors were saying we could still et away with 20k for F&F, but only because there were some pricy items involved - Huge Welsh dresser, Aga, summerhouse in the garden.

prufrock did you not do it in the end and if not why not?

Your buyers do seem to be changing the conditions of their offer. Can they do this under Scottish law? I wouldn't agree to it unless they were buying furnishings that could be genuinely valued at £20k.

ccbb yes it is ok under Scottish law to thrash out the details right up to when the missives are concluded.
It is like a game of ping pong between the lawyers!

hiya - my lawyers did this with the first house i bought to avoid stamp duty but it was only for 5grand. it included kitchen units and bathroom suite etc.

if you are not comfortable then don't do it. the buyers must have known to offer more than 250,000 that they would pay 3%.

oh we do have an aga. Can that really be counted as F and F?

aga, yes absolutely they go for a tidy some 2nd hand on ebay.

What has your solicitor said? I have checked our last sale and the split was 230 plus 10k. This too was in Edinburgh - do you see a theme here....

Anyhoo an AGA would (probably) count as a fixture as it can be in essence removed from the property without (much) damage - the accession of things from moveable to heritable and vice-a-versa can be fairly complicated and there is loads of case law on this so it is not always straighforward to say what is and is not as it can vary considerably. But if you are selling a house worth of furniture,curtains, carpets, garden shed maybe it can add up and may not be totally unrealistic.

Where you may have problems if the HMRC look is because it is at the stamp-duty threshold it may leap out at them - as tax avoidance making them likley to examine in more detail. But what is the chance of them actually doing so - I don't know BTW just asking the question.

Anyhoo we agreed to this 5 years ago, were advised at time not unusual and have had not issue.

BTW where are you selling in Ediburgh with an AGA for not that much money, quite jealous I haven't seen your house, given trawl the ESPC on a daily basis trying to find THE house and persuade DH to move back.

othing to do with stamp duty - we were in a bidding war (asking price was only 425) and after we had been promised that our knock out offer of 520 would be accepted and instructed solicitors etc, the agent came back and said the other buyer had offered to up their offer from 510 to 521. dh and I realised that we could go on forever and told them to get stuffed. My did we laugh when the agent came back to us (cash buyers) 4 months later and asked if we were still interested as buyers chain had fallen through.

gomez we are not in Edinburgh, that was someone else!

Bit further west!

actually there is quite a lot going with the hoose. It is being sold almost completely furnished! However lawyer says the stuff is valued at current market value,(not new for old) which in the case of second hand furniture is practically zilch

prufrock whole thing is a nightmare is it not?

AS I understand it, (this came up with our flat sale) you have to be able to prove that the items are worth that much, otherwise you could have real trouble.

20K sounds like way too much and the kind of amount they would investigate. and you would be liable for helping them avoid tax!

Have got the definitive answer from lawyer.

Angua is spot on.

Inland rev would be alerted and we would be implicated as well as sellers so we have asked them to delete this part of their offer.

both parties have ageeed on a more realistic figure of 10k for F and f

Makes sense. Good luck.