How Can This Be?

[FedupTeddiBear]

I would wait until the price appears on the land registry. If it appears at 240k then report it. if it appears at £185k then there should not be much of a problem - buyer should check the LR?

A good number of properties NEVER actually appear on the land registry.

This could be a likely event if the buyers are dodgy, so it may be a waste of time searching.

For those of you who say that ALL sold properties HAVE to appear, I know of several that I have searched for that simply did not get listed! These include a flat I rented in 2003 that was sold and was never listed, properties in a new development nearby were sold between 2004 and 2005 but never listed and I am sure that if I try I can think of other examples of fruitless searches of the land registry.

[The Conveyancer]

Hi

The easiest way to get them would be to report it to the Inland Revenue. If the Land Registry dont show the drop then it probably wouldnt have been declared on the Stamp Duty Return at the right figure either.

As a wise (but slightly dodgy) friend with her own business once said, lie to the bank, lie to anyone but never, ever diddle the taxman. He will hunt you down.

Not that I diddle anyone anyway, Im the sort of person who feels guilty going through the green channel at customs when I know damn well I have nothing to declare!

[Telometer]

report them to the inland revenue

For what? For paying stamp on 240k instead of 180k???

HMRC aren't going to send them to jail for paying too much tax. The biggest benefit is to taxpayers if they did overpay sdlt.

[The Conveyancer]

For what? For paying stamp on 240k instead of 180k???

HMRC aren't going to send them to jail for paying too much tax. The biggest benefit is to taxpayers if they did overpay sdlt.

Sorry, a bit of a mental moment there, although it is still fraud!

[herbert_goon]

A good number of properties NEVER actually appear on the land registry.

This could be a likely event if the buyers are dodgy, so it may be a waste of time searching.

For those of you who say that ALL sold properties HAVE to appear, I know of several that I have searched for that simply did not get listed! These include a flat I rented in 2003 that was sold and was never listed, properties in a new development nearby were sold between 2004 and 2005 but never listed and I am sure that if I try I can think of other examples of fruitless searches of the land registry.

I can confirm this also. My better half sold her place in Worthing and got the highest price on the street by a fair whack (although it was a wonderful place) to private buyers back in 2006 and it's not in any of the "sold prices" websites. Not sure if it's on the actual LR as I haven't bothered to check. Maybe some kind of IT problem?

[Telometer]

although it is still fraud!

Not necessarily. Potentially it may be fraud; potentially it may not.

[Paddles]

Not necessarily. Potentially it may be fraud; potentially it may not.

You're boring me now. If I posted a calculator to you to work out how you're going to get out of negative equity would you go away?

[Telometer]

Don't read it then...

If I go into negative equity, I shall send you a case of champagne. Bollinger 1985.

[Telometer]

In answer to Paddles on another thread. You have no evidence whatsoever that fraud is involved.

We don't know whether OP is telling the truth - it has been suggested that he is on a wind-up mission.

We don't know how OP got hold of the surveyor's report. Very unusual indeed. Try asking a surveyor for a copy of the report next time you sell. You won't get it. And it really doesn't sound like the sort of purchaser who could be asked for a copy, does it?

Assuming the transaction went through at the higher price, we still don't know that fraud was involved. It is not fraud to pay too much SDLT. It is not fraud to have a higher price on the land registry than the property is *worth*. The LR is not a source of VALUATIONS. It is a source of TRANSACTION amounts. The two are completely separate and two persons are at liberty to trade items at whatever value they like.

If the valuation was used to raise a mortgage, without being honest about the 'cashback' then yes, it would indeed be fraud.

On the evidence given we are not in a position to comment on whether or not this is fraud.

[The Conveyancer]

In answer to Paddles on another thread. You have no evidence whatsoever that fraud is involved.

We don't know whether OP is telling the truth - it has been suggested that he is on a wind-up mission.

We don't know how OP got hold of the surveyor's report. Very unusual indeed. Try asking a surveyor for a copy of the report next time you sell. You won't get it. And it really doesn't sound like the sort of purchaser who could be asked for a copy, does it?

Assuming the transaction went through at the higher price, we still don't know that fraud was involved. It is not fraud to pay too much SDLT. It is not fraud to have a higher price on the land registry than the property is *worth*. The LR is not a source of VALUATIONS. It is a source of TRANSACTION amounts. The two are completely separate and two persons are at liberty to trade items at whatever value they like.

If the valuation was used to raise a mortgage, without being honest about the 'cashback' then yes, it would indeed be fraud.

On the evidence given we are not in a position to comment on whether or not this is fraud.

I don't know if you have ever seen a Land Transaction Return, but it is very thorough. It asks exactly how much consideration in money or money's worth has changed hands. It lists the various options and you have to declare exactly what the transaction was made up of. Apparently the information goes to many, many different departments at the IR. It may not be wrong to pay too much SDLT but you sign the Land Transaction Return declaring the contents to be true. The IR may not care if they are benefiting, but it is still making a false disclosure on the form.

[Telometer]

I don't know if you have ever seen a Land Transaction Return, but it is very thorough. It asks exactly how much consideration in money or money's worth has changed hands. It lists the various options and you have to declare exactly what the transaction was made up of. Apparently the information goes to many, many different departments at the IR. It may not be wrong to pay too much SDLT but you sign the Land Transaction Return declaring the contents to be true. The IR may not care if they are benefiting, but it is still making a false disclosure on the form.

I have, although you are far more familiar with them than I am. I still contend that it is acceptable for two parties to agree how the transaction is structured - obviously provided the disclosures are correct.

Again, we are not party to the information in the return form.

Tell me, if you conveyance a new-build for a client, and carpets are 'thrown in', do you adjust the consideration on the SDLT form to make up for it?

If I had bought a 'distressed' property and hoped to make a profit on it, I'd be prepared to pay quite a lot for the benefit of the LR showing a higher price. And what has trading standards got to do with this? Nothing. It's not a number that will be disclosed to the eventual buyer - although his own research may well turn it up.

[TryingToSell]

We don't know how OP got hold of the surveyor's report.

I didn't get the report, and therefore I have no idea what the actual valuation said. Nor do I know how much money was borrowed against the house. However, I do know that the surveyor was fully under the impression that they were being asked to value a house which was being sold at £240k. I showed the surveyor round, made them a welcoming cup of tea, and had a general chat about what they were there for, what they would be looking at, etc etc. We discussed the weather, we discussed their extendable folding ladder, we discussed their shiney mercedes parked outside, and we had a one sided discussion about the house they were valuing. I asked them vague questions like "Does this house compare well with the others which are for sale on this estate?" and "Is the sale price realistic?". The surveyor quoted the £240k purchase price from their paperwork and I didn't correct them. The surveyor had also been told that I was a tennant - I didn't confirm or deny that one either. The surveyor was generally quite lazy, but very chatty - I mean, if I was a tennant showing them around, surely the sale price was confidential? Then again, a half decent surveyor would have known that the same house had been up for sale until about a week earlier with a 200k asking price.

I've bought three houses so far, and in every case the "homebuyers valuation report" has exactly matched the same price as I was buying at. This time I was the seller, but I reckon the same thing happened. It's easy money right? "I'm buying a house for X, can you value it please?" "Yes, certainly. It's worth X. Will you pay me a large fee now please?" "yes, there you go". Isn't that how lazy peope make money and housing booms are created?

[The Conveyancer]

I have, although you are far more familiar with them than I am. I still contend that it is acceptable for two parties to agree how the transaction is structured - obviously provided the disclosures are correct.

Again, we are not party to the information in the return form.

Tell me, if you conveyance a new-build for a client, and carpets are 'thrown in', do you adjust the consideration on the SDLT form to make up for it?

If I had bought a 'distressed' property and hoped to make a profit on it, I'd be prepared to pay quite a lot for the benefit of the LR showing a higher price. And what has trading standards got to do with this? Nothing. It's not a number that will be disclosed to the eventual buyer - although his own research may well turn it up.

Carpet would count as fixtures and fittings and would not be considered part of the consideration. However if I buy a house for say £249,000 with £5,000 for fixtures and fittings I would expect to have to justify to the Inland Revenue exactly how that amount is broken down.

[Telometer]

Carpet would count as fixtures and fittings and would not be considered part of the consideration. However if I buy a house for say £249,000 with £5,000 for fixtures and fittings I would expect to have to justify to the Inland Revenue exactly how that amount is broken down.

But reducing actual consideration paid in order to evade SDLT is a very different proposition to agreeing a sale price of 240 and some sort of a cashback of 60. (or whatever the figures were).

And anyway, carpets are NOT fixtures and fittings. You are wrong. They are chattels. SDLT is not due on the transfer of tangible moveable property and if you fail to point that out to your clients I am sure they will not be happy! The only reason to have them for 'free' is to be economical with the truth provided to the mortgage company - which I am sure you also point out to your clients.

[The Conveyancer]

But reducing actual consideration paid in order to evade SDLT is a very different proposition to agreeing a sale price of 240 and some sort of a cashback of 60. (or whatever the figures were).

And anyway, carpets are NOT fixtures and fittings. You are wrong. They are chattels. SDLT is not due on the transfer of tangible moveable property and if you fail to point that out to your clients I am sure they will not be happy! The only reason to have them for 'free' is to be economical with the truth provided to the mortgage company - which I am sure you also point out to your clients.

Depends on how you describe fixtures and fittings I suppose. The Law Society Fixtures and Fittings Questionnaire has them described at such. There is very little difference between chattels and fixtures and fittings, it is just wording.

The carpets probably only cost the developments peanuts, the lender isnt particularly worried about them to be honest. If there is a box asking what "Benefits" are being offered I would list them as well as every other item that is included in the purchase price.

The developers arent doing it to lie to mortgage companies, they are doing it to sweeten up buyers, it is totally different. You cannot compare free carpets and curtains with substantial "allowances" "cashbacks" or what ever wording the developer chooses to use.

Anyway Im not getting into any protracted discussions over this, sorry

[Telometer]

There is very little difference between chattels and fixtures and fittings, it is just wording.

I don't need to tell you that the Stamp Office will disagree with that statement. There is a difference between land and tangible moveable property - SDLT is due on the former, but not the latter.

The Law Society list is there to help property buyers ensure what is included in a property; not to interpret the law.

[The Conveyancer]

I don't need to tell you that the Stamp Office will disagree with that statement. There is a difference between land and tangible moveable property - SDLT is due on the former, but not the latter.

The Law Society list is there to help property buyers ensure what is included in a property; not to interpret the law.

Right, last post on this. In conveyancing practice they are used to mean the same thing. The property is one thing, the fixtures and fittings (otherwise known as chattels) is another. You pay tax on the property not on the chattels (otherwise known as the fixtures and fittings). This may not be 100% right in the true legal meaning of the words but if I exchange Contracts and tell the otherside the price is 250k for the property and 10k for the fixtures and fittings they know exactly what I mean. This is how we refer to it. I have never had a solicitor say to me "actually I think the correct term for the items that are being purchased are chattels". He would be within his rights to, but he would be a k***.

The stamp office wouldnt care because they would ask what the items were, I would list carpets, curtains etc. and they would say they are moveable and so not liable for SDLT.

Just as the tax shouldn't be described at Stamp Duty anymore as it is now Stamp Duty Land Tax, we use different words but know what each other are talking about. I wouldn't dream of correcting another solicitor for saying "Stamp Duty" as I would be a k*** myself. In fact should it even be called the "Stamp Office" anymore when documents are no longer stamped.

Stop being petty.

[sleepless]

What about Capital gains Tax

If they bought for 240, sell for 200 thats 18% extra on 40,000

[Telometer]

What about Capital gains Tax

If they bought for 240, sell for 200 thats 18% extra on 40,000

I wonder whether you're right. And as iirc (sorry, cannot be bothered to check) it was bought through a company, that is 20% to 28%.

Edited March 14, 2008 by Telometer

[wheresitgone]

What about Capital gains Tax

If they bought for 240, sell for 200 thats 18% extra on 40,000

Sorry, don't quite understand. Surely that is £40,000 loss so no capital gains applies.

[Telometer]

That's the point. For tax purposes it is not a profit.

This of course would be utterly deceitful and the perpetrator of this would be likely to end up in jail. But he would have clear evidence of having paid 240k for the property.

So if he sells it for 240k, no tax to pay on the profit.

If he sells it for 200k, then he has a "capital loss" to offset against a gain he has made on a different property.