Question: We are buying an old farmhouse to renovate as a holiday home. It needs a lot of work. I have asked our solicitor to apportion £15,000 of the purchase price to fittings and contents in the contract so that at least we won't pay stamp duty on that, but he seems reluctant, though hasn't explained why. What's the problem?
© Merrily Harpur
Answer: When buying a property it is the buyer's responsibility to complete a land transaction return — an SDLT1.
Stamp Duty Land Tax is not payable on "chattels" which are moveable contents, but is paid on fixtures, which are part of the property.
If you decide to apportion some of the price to contents, that must be done on a just and reasonable basis, and if the taxman disagrees you may be subject to an inquiry.
Prepare a schedule with valuations for each item. There is no hard and fast rule about chattels, but items such as carpets, curtains and blinds, free-standing furniture, light shades and fittings (unless recessed), and plants in containers are generally treated as chattels. Conversely, things such as burglar alarms, boilers and fitted kitchens are not.
Your solicitor probably thinks that £15,000 for chattels is a bit steep and is concerned about any attempt to defraud the Revenue. Show your solicitor your schedule and be prepared to justify everything on it.
Do remember that any concerns your solicitor has are likely to be shared by your seller's solicitor, which might hold up the sale.
What's your problem?
If you have a question for Fiona McNulty, email email@example.com. We regret that questions cannot be answered individually.
Fiona is a partner in the residential real estate team at Thring LLP (www.thrings.com).
These answers can only be a very brief commentary on the issues raised and should not be relied on as legal advice. No liability is accepted for such reliance. If you have similar issues, you should obtain advice from a solicitor.