Avoiding stamp duty....

sophiemai

We're in the process of selling our house and the asking price is 10k over the stamp duty cut off of 317k. We've been approached by someone who wants to buy the house but wants to give us the 10k separate so as to avoid stamp duty...what I want to know is if this will cause us any hassle or is it ok for us to turn a blind eye as it is them avoiding the stamp duty?

Zambia

sophiemai wrote:

We're in the process of selling our house and the asking price is 10k over the stamp duty cut off of 317k. We've been approached by someone who wants to buy the house but wants to give us the 10k separate so as to avoid stamp duty...what I want to know is if this will cause us any hassle or is it ok for us to turn a blind eye as it is them avoiding the stamp duty?

Hmm dodgy .

Bottom line if the revenue suspect this has happened you or the buyer may face penalties my advice is dont. I know the buyer would face a tax fee if the revenue suspected, not sure about you as the seller as there is no tax you are paying anyway on the sale.

No one can tell you here how to evade tax as that would be illegal. Stay tuned to the thread the question will be answered in this forum.

sophiemai

Hey, I know what you mean about it being dodgy but I really just want to know if it will have any implications on us....as we all know, the houses are taking longer to sell and other people are having to drop prices, we can't afford to drop the price any more and we don't have a queue of people waiting to buy. I guess what I'm asking is does anyone know for definite if we could be fined/prosecuted?

frizzefreckles

I know someone who sold their house in this way. The couple buying the house from them just said the extra ten thousand was for the furniture in the house. So if you leave a chair or something behind it's all above board. It seems to be a common enough practice.

Sagat06

The most common way of doing it is to pay for house + contents.... its completely against the rules and your solicitor will advise against it, but it has been done.

Zambia

sophiemai wrote:

Hey, I know what you mean about it being dodgy but I really just want to know if it will have any implications on us....as we all know, the houses are taking longer to sell and other people are having to drop prices, we can't afford to drop the price any more and we don't have a queue of people waiting to buy. I guess what I'm asking is does anyone know for definite if we could be fined/prosecuted?

Is 317,000 what houses are selling for in your area at this time? Personnally in a market on this down turn I dont see how the revenue could calculate it.

But to answer your direct question I know of no implications to you if this transaction took place. Then again wait and this will get answered properly.

whizzbang

That's a pretty clear case of tax evasion isn't it?
http://www.askaboutmoney.com/showthread.php?t=51532

I can imagine the revenue will be taking a look into places that sold for 317,000 but with mortgages of 330,000 and the like.

If you accept an offer like this I'd imagine you are involved in tax evasion which would be a bad thing.

I'm not sure what the punishment would be, maybe jail, but more likely a large fine plus interest from when the offence took place. Also remember that there are two of you involved, the buyer and the seller so chances are you are twice as likely to get caught than your regular tax evasion. One of you is bound to slip up.

Seriously risky business. And yes seriously illegal from what I know.

Afuera

How would you insure that the buyer actually delivered the extra 10k? I presume that this whole transaction would be outside the realm that a solicitor would be willing to work in as if they facilitated something like this they'd be liable to be charged also.

Lex Luthor

its the buyer that is evading the tax, not the seller

go for it if you can get a quick sale

whizzbang

Lex Luthor wrote:

its the buyer that is evading the tax, not the seller

go for it if you can get a quick sale

I wonder if the revenue looks at it that way

jimmycrackcorm

There is absolutely nothing wrong in having two seperate transactions - one for the house and another for whatever else provided they are not linked in any way. i.e. no sale note nor contract confirming that the purchase of the house is dependent on purchase of contents.

whizzbang

jimmycrackcorm wrote:

There is absolutely nothing wrong in having two seperate transactions - one for the house and another for whatever else provided they are not linked in any way. i.e. no sale note nor contract confirming that the purchase of the house is dependent on purchase of contents.

have you asked the revenue?

jimmycrackcorm

whizzbang wrote:

have you asked the revenue?

Actually yes. A relative recently purchased in this manner.

whizzbang

jimmycrackcorm wrote:

Actually yes. A relative recently purchased in this manner.

Really? Thats madness, I've always heard that the "whole consideration" is what is taken into account when gaging Stamp duty. Perhaps if the extras are worth the value then its ok but if you try and say you will pay 10k for a old couch then you are in trouble? I'm surprised they said it is cool.

daveirl

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Zambia

daveirl wrote:

This post has been deleted.

I would have to agree

aphex™

Two things-
Your 'second' transaction is probably subject to stamp duty too. Somebody said furniture, that probably is. You need to go find section 21 or 31 (forget which) if the 1999 Stamp duty consolidation act. (I'm not a lawyer by the way.)

Your conveyance document will state its not part of any other transaction whatsoever. There is a risk the buyer may not give you the 10k.

seamus

jimmycrackcorm wrote:

There is absolutely nothing wrong in having two seperate transactions - one for the house and another for whatever else provided they are not linked in any way. i.e. no sale note nor contract confirming that the purchase of the house is dependent on purchase of contents.

That is of course assuming that you are conducting two separate transactions, and not just trying to avoid stamp duty.

Afaik, from the seller's side you run two risks:
1. Aiding the buyer in avoiding Stamp Duty (this may or may not have criminal implications)
2. Not getting your money. Since this 10k is not written down in contract anywhere, you're not entitled to it. Your solicitor will sign off on a house worth 317k, and will probably walk away if you mention any under the table cash deals to him. I have heard of a handful of cases where the deal was done, and then an unhappy buyer decided that the house wasn't worth that extra cash after all.

Smoggy

For a few hundred euro and a seperate solicitor a contract for the housing contents can be drawn up.