Avoiding high rate stamp duty

[oneman]

Currently looking at buying a property. We know the sellers so we are not going through estate agents or taking out a mortgage against the place. They are asking for £295k, was wondering if it worth asking them to put the official selling price as £245k and I give them the other £50k as a bank transfer ? What is the risk to them and me ?

 

[seanicca]

Deleted, me being thick sorry

Sent from my HTC One using Tapatalk

 

[Him Her]

Currently looking at buying a property. We know the sellers so we are not going through estate agents or taking out a mortgage against the place. They are asking for £295k, was wondering if it worth asking them to put the official selling price as £245k and I give them the other £50k as a bank transfer ? What is the risk to them and me ?

If you get rumbled you'll get done for tax evasion I guess. On the other hand how would they find out? After all, you could both swear blind it was a loan!

 

[smirnoff_rules]

cant u say you bought to fitting and so on ?

 

[little_pob]

cant u say you bought to fitting and so on ?

This. £245k + £50k for "furnishings".

 

[oneman]

cant u say you bought to fitting and so on ?

looks like HMCR are cracking down on it by comparing selling price to market value for any houses that fall just under the £250k limit. Will have to probably try and negotiate the price down a bit.

 

[The Dentist]

They will always find out. Im sure such a big transfer will alert someone.
If its worth 295, then say you bought it for 270 or something.

 

[Him Her]

Not worth the hassle TBH. Up to 250k it's 1%, then it's 3% to 500k. That's £300 per £10k so understating by £20k in the OP case saves £600, worth having but not worth the risk.

 

[baggy69]

Not worth the hassle TBH. Up to 250k it's 1%, then it's 3% to 500k. That's £300 per £10k so understating by £20k in the OP case saves £600, worth having but not worth the risk.

I don't think this is the case its 3% on the total amount so
245k stamp duty = £2450
295K stamp duty = £8850
An extra £6400

This is where its totally unfair and yet again another tax rip off.

 

[D 8 RCS]

I don't think this is the case its 3% on the total amount so
245k stamp duty = £2450
295K stamp duty = £8850
An extra £6400

This is where its totally unfair and yet again another tax rip off.

@Him Her the above that @baggy69 has posted is absolutely correct, which I suppose with house prices the way they are is slightly unfair and only opens up the system to abuse.

 

[Rumpelstiltskin.]

That is correct
1% on 250000
2500
but buy a house for 251000
3%
7530
House costs 1000 more and you cop for 5k more duty ffs
No wonder people look for ways around it.

 

[oneman]

I don't think this is the case its 3% on the total amount so
245k stamp duty = £2450
295K stamp duty = £8850
An extra £6400

This is where its totally unfair and yet again another tax rip off.

I think @Him Her was replying to the previous post by @The Dentist suggesting that I offer £275k as house price and £20k for furnishing. A difference of £20k for which I would save £600.


As a couple of people have said its a dumb system, you go over £250k by a quid and you pay 3% on the whole amount, not just the amount over £250k which I think is what people are complaining about and yes I totally agree. It's the only tax I can think of that works that way.

 

[Him Her]

@oneman is correct. Apparently HMRC get interested if so-called chattels (furnishings etc.) hit £8-10k which would get nowhere near the 1% band.

I was simply juggling a few numbers to see if any savings could be had that HMRC wouldn't be interested in.