Stamp duty advice

[nixy]

We have seen a house we like and the lady that owns it like's ours. Ours is £300k and hers is £365k. Someone told me that if we are swapping houses we can do a deal whereby we sell our houses to each other at a stupidly low rate and avoid stamp duty - is that possible? And if so, how does it affect getting the mortgage when you technically need more money that the house is sold for. Confusing..............

[Zedrush]

wow what is the chances that the house you are interested in the owners like your house in return.

 

I know you dont need me saying it Nixy, find out why they want to move and why they are will to buy a house of slighly lesser value, just dont want to see you get stung later down the line

[Digsy]

Its possibly tax evasion. Be careful, Nixy.

[nixy]

Easy, she's split up from her husband. Lives in the next village so our house is perfect for her but the top end of her price bracket. She has a nice long PRIVATE drive and a double garage - just what I need but she's at the top of our price bracket so any saving on stamp duty would be great.

[Sarnie]

We have seen a house we like and the lady that owns it like's ours. Ours is £300k and hers is £365k. Someone told me that if we are swapping houses we can do a deal whereby we sell our houses to each other at a stupidly low rate and avoid stamp duty - is that possible? And if so, how does it affect getting the mortgage when you technically need more money that the house is sold for. Confusing..............

 

Can't be done. They have people at the Land Registry who process all the stamp duty charges. Its their job to ensure that property purchase prices are in line with other purchases in that area. Obviously its illegal too.

 

If you go to:

 

www.houseprices.co.uk

 

you can see what properties have been sold for in your local area. The property would have to a repossession or derelict to justify why its significantly below market value. To avoid stamp duty all together you'd have to sell your houses to each other for less than £125k which is going to raise alarm bells with someone along the way!

[Zedrush]

Easy, she's split up from her husband. Lives in the next village so our house is perfect for her but the top end of her price bracket. She has a nice long PRIVATE drive and a double garage - just what I need but she's at the top of our price bracket so any saving on stamp duty would be great.

 

Hmm thats fair enough, good luck with the sale Nixy, you should pm Sarnie about the stamp duty thinks thats his area

[H5]

We have seen a house we like and the lady that owns it like's ours. Ours is £300k and hers is £365k. Someone told me that if we are swapping houses we can do a deal whereby we sell our houses to each other at a stupidly low rate and avoid stamp duty - is that possible? And if so, how does it affect getting the mortgage when you technically need more money that the house is sold for. Confusing..............

 

Can't be done. They have people at the Land Registry who process all the stamp duty charges. Its their job to ensure that property purchase prices are in line with other purchases in that area. Obviously its illegal too.

 

If you go to:

 

www.houseprices.co.uk

 

you can see what properties have been sold for in your local area. The property would have to a repossession or derelict to justify why its significantly below market value. To avoid stamp duty all together you'd have to sell your houses to each other for less than £125k which is going to raise alarm bells with someone along the way!

 

Where there's a will there's a way......

 

Get a mate to survey both and say they're about to fall down!

 

(Joke, before I get flamed!!)

[Sarnie]

We have seen a house we like and the lady that owns it like's ours. Ours is £300k and hers is £365k. Someone told me that if we are swapping houses we can do a deal whereby we sell our houses to each other at a stupidly low rate and avoid stamp duty - is that possible? And if so, how does it affect getting the mortgage when you technically need more money that the house is sold for. Confusing..............

 

Can't be done. They have people at the Land Registry who process all the stamp duty charges. Its their job to ensure that property purchase prices are in line with other purchases in that area. Obviously its illegal too.

 

If you go to:

 

www.houseprices.co.uk

 

you can see what properties have been sold for in your local area. The property would have to a repossession or derelict to justify why its significantly below market value. To avoid stamp duty all together you'd have to sell your houses to each other for less than £125k which is going to raise alarm bells with someone along the way!

 

Where there's a will there's a way......

 

Get a mate to survey both and say they're about to fall down!

 

(Joke, before I get flamed!!)

 

Surveys have to be performed by someone thats independant of the buyer and mortgage company.

 

You could down value the properties a bit but I'd advise against anything drastic

[Guest prescience]

On the Fixtures and Fittings Information form (based on the Law Society guideleines), you have to indicate if there are any items which you have agreed a price between you for. In that section it says "The price agreed must be a just and reasonable value for the items. To agree a figure which is not a just and reasonable valuation for the purposes of saving Stamp Duty is a Criminal Offence".

 

The point being if you agree to pay £200 too little for your washing machine and its a criminal offence, then at the 'whole house' scale it will also be a criminal offence, no question

[nixy]

so in other words you can't sell your house for what you like then?

[Guest prescience]

so in other words you can't sell your house for what you like then?

 

I think the answer given the above is yes and no

 

However, it looks like until 2003, the situation you mentioned in your original post was the case, but a law change in 2003 put paid to that

 

http://news.bbc.co.uk/1/hi/business/4259990.stm

[Zedrush]

probably a long shot so excuse my ignorance, but could you not auction each others house perhaps on ebay or an environment where you both are intended to have the winning bid, give it a listing name of 8eyhsu83 so no one will pick it up apart from the buyer and then agree a price to list at in order to have a lesser stamp duty. People do it all the time with second hand goods wouldnt this fall under the same catagory?

[Chesterfield]

Cant you trade yours in?

 

I know some companies will take an existing house in part payment. Im fairly sure a solicitor will be able to draw up a similar agreement for an individual selling/buying a property.

 

Im not certain if that classes as a sale and is then subject to the same fees however.

 

There may be another very long winded and convoluted way round the process that would avoid the tax I reckon.

 

You can place a property in trust to an individual that would decree that if you live for another 7 years then the property becomes theirs, this is how many houses avoid inheritance tax and Im sure could be used to avoid stamp duty too - but obviously requires a fair ammount of trust on the "buyers" side, and a solicitor may be able to sort a contract to ensure it works.

 

Where there is a will there is a way.

[Guest prescience]

probably a long shot so excuse my ignorance, but could you not auction each others house perhaps on ebay or an environment where you both are intended to have the winning bid, give it a listing name of 8eyhsu83 so no one will pick it up apart from the buyer and then agree a price to list at in order to have a lesser stamp duty. People do it all the time with second hand goods wouldnt this fall under the same catagory?

 

In theory, yes of course but looking at the link above, you have to complete a Land Regristration Form for any transfer and at that point, as Sarnie notes, the discrepancy (low value) would be picked up and not only would you end up paying full whack but you could get your name on the PNC

[nixy]

It should be those robbing swines with their names on the PNC - it's a total rip off tax as per usual! I reckon we could drop ours to £250 and that would save her over 6k as she would go down to the 1% bracket - then we could split the difference.

[Guest prescience]

Cant you trade yours in?

 

I know some companies will take an existing house in part payment. Im fairly sure a solicitor will be able to draw up a similar agreement for an individual selling/buying a property.

 

Im not certain if that classes as a sale and is then subject to the same fees however.

 

There may be another very long winded and convoluted way round the process that would avoid the tax I reckon.

 

You can place a property in trust to an individual that would decree that if you live for another 7 years then the property becomes theirs, this is how many houses avoid inheritance tax and Im sure could be used to avoid stamp duty too - but obviously requires a fair ammount of trust on the "buyers" side, and a solicitor may be able to sort a contract to ensure it works.

 

Where there is a will there is a way.

 

True on the latter point, but your example pre-supposes that you a) will live for 7 years (both parties) and neither of you will wish to move on in that time (a 3rd party would never get involved in a future sale). The latter point would be a very high risk given Nixy's neighbours and the reasons she herself is moving

[Zedrush]

Cant you trade yours in?

 

I know some companies will take an existing house in part payment. Im fairly sure a solicitor will be able to draw up a similar agreement for an individual selling/buying a property.

 

Im not certain if that classes as a sale and is then subject to the same fees however.

 

There may be another very long winded and convoluted way round the process that would avoid the tax I reckon.

 

You can place a property in trust to an individual that would decree that if you live for another 7 years then the property becomes theirs, this is how many houses avoid inheritance tax and Im sure could be used to avoid stamp duty too - but obviously requires a fair ammount of trust on the "buyers" side, and a solicitor may be able to sort a contract to ensure it works.

 

Where there is a will there is a way.

 

True on the latter point, but your example pre-supposes that you a) will live for 7 years (both parties) and neither of you will wish to move on in that time (a 3rd party would never get involved in a future sale). The latter point would be a very high risk given Nixy's neighbours and the reasons she herself is moving

 

Hmm Nixy maybe in a retirement home by then

[nixy]

and you will still be in hospital!

[Guest prescience]

and you will still be in hospital!

:lol:

[Zedrush]

[Chesterfield]

Hmmm yes - back to square one.

 

The mind boggles.

 

What a surprise the government introducing this little change to clobber even more out of folk.

[nixy]

that link was very good - certainly an eye opener. Robbing thieving swines! Inheritance tax is the other one - why the hell should what you leave behind be taxed when you've already been taxed on it. Makes me fume!

[Zedrush]

stealth tax is a joke

[Stew]

It will be interesting to see Digsys take on this too.

[sl114]

that link was very good - certainly an eye opener. Robbing thieving swines! Inheritance tax is the other one - why the hell should what you leave behind be taxed when you've already been taxed on it. Makes me fume!

Exactly my thoughts on this whole thing and im not going to get started or i will not stop. Again its just the government raping all of us!