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Harold Bishop

Offer Of £30K Cash And £250K Via Solicitors

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My father in law has been offered £30k cash plus £250k through the legal channels. Saves the buyer nearly £6k on stamp duty but .... this is tax evasion.

Also, it would mess with the house price indexes if this was wide spread.

No benefit to the vendor, so , why should he say yes ?

Edited by Harold Bishop

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Personally I wouldnt get involved with it as it is a huge risk just for a few extra k for someone else.

Was it the EA who came to him with this offer, or direct from the buyer with no one in between.

If it was the EA, then you could record it and get him sacked. (as all dodgy EAs deserve)

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My father in law has been offered £30k cash plus £250k through the legal channels. Saves the buyer nearly £6k on stamp duty but .... this is tax evasion.

Also, it would mess with the house price indexes if this was wide spread.

No benefit to the vendor, so , why should he say yes ?

Congratulations Harold you are an utter selfish fool.

You are just looking at for your home-ownerist self and deserve all you get.

Whatever buyers do or not do is of no consequence to you.

Does your father in law know you have risked his cashflow and jeopardised a sale he wont get naturally ?

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My father in law has been offered £30k cash plus £250k through the legal channels. Saves the buyer nearly £6k on stamp duty but .... this is tax evasion.

Also, it would mess with the house price indexes if this was wide spread.

No benefit to the vendor, so , why should he say yes ?

£30k in £20/£50 notes is very hard to spend or do anything with.

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My father in law has been offered £30k cash plus £250k through the legal channels. Saves the buyer nearly £6k on stamp duty but .... this is tax evasion.

Not if he could separate the transaction into the house including land, and something else. It is possible to sell some of the interior fittings like carpets, curtains and blinds separately. They would have to be very nice carpets, curtains and blinds though.

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He shouldn't say yes. After all, it might be HMRC trying to buy his property and a saving of £5.6k isn't worth a stretch inside! I think fixtures and fittings is limited to 2.5% save barely worth the legal work.

My father in law has been offered £30k cash plus £250k through the legal channels. Saves the buyer nearly £6k on stamp duty but .... this is tax evasion.

Also, it would mess with the house price indexes if this was wide spread.

No benefit to the vendor, so , why should he say yes ?

Edited by fallingbuzzard

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My father in law has been offered £30k cash plus £250k through the legal channels. Saves the buyer nearly £6k on stamp duty but .... this is tax evasion.

Also, it would mess with the house price indexes if this was wide spread.

No benefit to the vendor, so , why should he say yes ?

Any seller would be mad to accept such an offer.

The "contract" for the 30K is completely unenforcable and if the buyer decides not to pay it on completion day there is nothing at all that the seller could do to (legally) collect it.

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Any seller would be mad to accept such an offer.

The "contract" for the 30K is completely unenforcable and if the buyer decides not to pay it on completion day there is nothing at all that the seller could do to (legally) collect it.

He could insist on a bag full of sovereigns, sold to him at face value as a seperate deal. If he could find someone he could trust to execute the transaction, for a sovereign or two of course.

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He could insist on a bag full of sovereigns, sold to him at face value as a seperate deal. If he could find someone he could trust to execute the transaction, for a sovereign or two of course.

That should work shouldn't it? Britannias are legal tender for their face value although their market value is much higher.

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If someone were to offer me this inducement to sell it would set off a heap of alarm bells. Smells like tax evasion - don't **** with HM Revenue & Customs would be my instinct.

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Congratulations Harold you are an utter selfish fool.

You are just looking at for your home-ownerist self and deserve all you get.

Whatever buyers do or not do is of no consequence to you.

Does your father in law know you have risked his cashflow and jeopardised a sale he wont get naturally ?

In amongst lots of very sound advice in this thread, your response, ozmanky, is just an unhinged rant. Try engaging your brain.

The "direct" cash-plus offer will be turned down and the potential buyer directed to the EA. Luckily, there is another 'conventional' offer of the same amount under consideration.

This is the first time I have encountered such blatant evasion of stamp duty. I wonder if it is more common. I am not surprised as stamp duty is a large chunk of money and the jump from 1% to 3% is not very tapered.

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He could insist on a bag full of sovereigns, sold to him at face value as a seperate deal. If he could find someone he could trust to execute the transaction, for a sovereign or two of course.

In what way could he "insist"? That's the part of the deal that you have to fix.

tim

Edited by tim123

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No solicitor would agree to get involved with this either.

They wouldn't be aware. As far as they are concerned the selling price is £250k. However, the vendor, agent and buyer are all in on the scam and at least one of them may have a duty of care to disclose the cash sum.

Coincidently, I viewed a victorian terrace today and the agent confirmed that the cash plus deals are not uncommon. As far as he is concerned, the selling price is £250 k and that's what he charges his fee on. He just didn't want to know about any other money or assets passing between buyers and vendors. I suspect he is in a very murky place !!! Probably quite comfortable there as well !

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They wouldn't be aware. As far as they are concerned the selling price is £250k. However, the vendor, agent and buyer are all in on the scam and at least one of them may have a duty of care to disclose the cash sum.

Coincidently, I viewed a victorian terrace today and the agent confirmed that the cash plus deals are not uncommon. As far as he is concerned, the selling price is £250 k and that's what he charges his fee on. He just didn't want to know about any other money or assets passing between buyers and vendors. I suspect he is in a very murky place !!! Probably quite comfortable there as well !

Yep,

The relevent act is "The Money Laundering Regulations 2003" and a person who is engaged in "(f)estate agency work;" is required to report scams of this type if (s)he is aware of them.

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Like it or not deals of this kind are common practice, and so long as it's a private agreement (ie does not appear on the contract) then there's nothing the inland revenue can do about it.

A workable practice for the seller is to instruct the EA not to release the keys to the buyer until the cash funds have cleared.

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It's entirely the (last) government's fault that this happens, and they deserve losing out on all the tax revenue that they do because of the stupid stamp duty tax structure. A FTB going over the stamp duty threshold will suddenly need to find an extra £7500 in cash to pay the stamp duty,in addition to their deposit and solicitors' fees. No wonder buyers struggling to amass a deposit try everything they can to avoid it.

I'll give you one guess who introduced this stupid 3% tax threshold at £250k.

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? as opposed to removing this crazy threshold thereby allowing vendors to ask for even more???

I dunno, I think this helps FTBs, I mean, if I was buying the OP's father's house I'd offer the bloody 30k cash and stiff him. Of course, he'd know where I live so I'd have to offload the property pronto, but 30k (not counting costs) is not to be sniffed at.

If you are on the vendor's side, or lawyer's side, then you are asking for a beating.

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? as opposed to removing this crazy threshold thereby allowing vendors to ask for even more???

Well duh. The 250k limit means it's virtually impossible to legally sell a house in the 250-280k deadzone, so houses that should be in this area get marked up nearer 300k. Don't see how that does buyers any favours.

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OP Why are you worried about skewed house price index. The VI's have already tweaked and adjusted them to suit their agenda prior to general release.

Dont know where your relatives house is ....... but if £280k was a fair price it would have been snapped up by now and the under the counter guy could go whistle.

bergkamp

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It's entirely the (last) government's fault that this happens, and they deserve losing out on all the tax revenue that they do because of the stupid stamp duty tax structure. A FTB going over the stamp duty threshold will suddenly need to find an extra £7500 in cash to pay the stamp duty,in addition to their deposit and solicitors' fees. No wonder buyers struggling to amass a deposit try everything they can to avoid it.

I'll give you one guess who introduced this stupid 3% tax threshold at £250k.

Can anyone explain to me why stamp duty isn't charges aren't at the margin but on the total value? .e.g. why aren't they 1% of the first 250k, then 3% of the next 250k etc.? Were they intentionally designed to distort the market?

Edited by Tiger Woods?

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  • 311 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • Even
      • up 2.5%
      • up 5%



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