Stamp Duty

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They also arrange open house days where you are expected to go out. They then canvas and wheel in the punters, often simultaneously, which in itself creates more of a sense of demand.

.andy
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6% is the norm, but most agencies can be negotiated down in a competitive area. If your house is worth over $100,000 you can usually find someone to do it for less.

This depends on the state. The west coast has nearly all sales dione without lawyers, but they are still required in New York. States standardize the contracts, then use lawyers only for complicated sales. All sales go through "escrow", where all papers are signed, large banker's cheques and keys are exchanged -- at that time, legal title passes to the buyer. We DID do all the negotiating for the property, which could save a buyer a lot of money, or the seller a lot of legal responsibility.
The

Agents do arrange all inspections. The cost of those inspections is paid according to local custom - some paid by the seller, others by the buyer. A good agent will have inspections done before putting the house on the market, by good inspectors. Then the chances of "falling out of contract" (the sale falls apart) are greatly diminished.

I have noticed that agents here do not want to know anything about the condition of the property -- if they don't see it, it doesn't exist. Over there, agents must do their own inspection and disclosure forms.
I was an agent for a few years, but found it was hard work. For all the differences between here and there, the buyers and sellers are all the same -- they want to hide everything from the other side, then blame someone else when it all goes pear-shaped.
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wrote:

Your suspicion is incorrect.
Tony
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I recommend talking to your local Citizens Advice Bureau. Some of them do free 1/2 hour solicitors initial interview from volunteer solicitors. This should be long enough to establish if you are on dodgy ground.
Selling things at significantly less than their market value is not always the clever wheeze it seems. AFAIK it is generally treated as a sale at the current market value and a gift of the money.
I suspect you may be liable for stamp duty at the current market value of your house if you sell for an obviously trivial sum. This would probably be viewed as deliberate tax evasion.
An outright gift may be free of tax (check), but would certainly figure in any inheritance tax calculation if you (or your partner if the house is in joint names) don't last the 7 years.
If something sounds like a really great way of avoiding paying tax (and you aren't a millionaire industrialist) then the chances are someone else has thought of it before and blocked the loophole. :-(
Cheers Dave R
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One thing you should avoid is passing the existing mortgage over to her. If she needs a mortgage then she should get a new one. Not for any legal reasons, but because I have just been jumping through that particular hoop and regretted it. The building society (Halifax) couldn't cope with such an unusual situation and took four months to do the paperwork. As it happened, that didn't matter for me, but I wouldn't go down that road again.
Anna -- ~~ Anna Kettle, Suffolk, England |""""| ~ Pargeting, decorative and traditional / ^^ \// lime plasterwork |______| www.kettlenet.co.uk 07976 649862
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There are all sorts of pitfalls and the stamp duty will have to be paid on the open market value. In order to minimise the costs and make the best use of the tax exemptions that are available you must use a solicitor. His fees will far outweigh the savings you might imagine you could make by DIY ing it. Should not cost more than a few hundred pounds. They can also deal with the conveyance that will be needed at the same time. The new building society will probably insist on the searches being done anyway. You will be VERY ill advised if you act on such a transaction without professional help. IANAL but have been involved in a similar transaction.
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Correction! Not on open market value.
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wrote:

We did this exactly this about a year ago, the solicitor and IR were quite happy that no stamp duty was due as the transaction was 35k. The seller had to sign something saying he wasn't going to be declared bankrupt, and there would be Inheritence tax implications subject to death in the next 7 years and large estates, otherwise no problem.
Jim.
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Hello again
Well I seem to have stirred up a bit of a hornets nest with my question about Stamp Duty. I am very impressed with how helpful everyone is trying to be, and have found the replies to be fascinating as well as informative.
Can I clarify one or two points in my original post which have caused some confusion and sent a few people in the wrong direction. Firstly, as things stand at present, there are no Inheritance Tax implications. If I died tomorrow, my estate would be well short of the threshold for that - and anyway in the event that I suddenly became richer, and my wife and I both died within the next seven years, I am quite prepared to make a declaration so that the full market price of the property comes back into the Inheritance Tax equation. Secondly, the purpose of the exercise outlined in my OP is not entirely as I explained - but there is no attempt on my part to evade tax. I will explain more fully.
The real reason why I wish to sell my house to my daughter in this manner is, because of a change of circumstances, I find myself in rather a difficult position - I am struggling to pay my mortgage. By modern standards I have a relatively small mortgage, but because of my age (middle 50s) it is payable over a much shorter period than usual - and, consequently, the monthly payments are correspondingly high. One solution I thought would be to sell the property to my daughter for 35,000, sufficient to clear the mortgage - much more than this figure and she would struggle herself to meet the monthly payments (with her other commitments - student loan repayment, rent on flat, etc). As I said previously, she will inherit the house one day anyway - but obviously not if we lose it ourselves. She does not own any other property, and neither do I. What I said about my wife and I moving to another house is not untrue, but we would not be able to do this for at least a year. In the meantime we would probably stay where we are - paying a small rent.
Obviously this whole project would be pointless if we have to involve ourselves in expenses of probably several thousands of pounds in Stamp Duty, surveys, searches, etc. Hence my question.
Regards
Phil
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There may be issues if you are subsequently found bankrupt, as the disposal of the property below true value may be illegal if you are doing it to shield your assets from your creditors. It is illegal to give your possessions to your family, be made bankrupt and then have it gifted back. Not that every famous person in difficulties hasn't tried it.
Given that you will be living in the house after the transaction, it may well attract attention that the deal is not what it seems. If you are likely to need long term care or income support, they might be extremely suspicious that you are artificially disposing of property to maximise your claim.
This situation is too involved to diy. You may get a more knowledgable response in uk.legal.
Christian.
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Phil Norman wrote in message ...

The idea that you're doing something previously unheard of and that you'll need all kinds of accountants and solicitors is faintly ridiculous. Go to the horse's mouth and talk to the Inland Revenue. They probably have a leaflet covering your situation or it'll be the tenth time they've been asked the question that day. Why use middle men?
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On Wed, 6 Aug 2003 11:48:22 +0100, "stuart noble"

Because most people at the IR that you will typically reach are clueless on anything much more than self-assessment. If you ask something about CGT, even relatively simple, they don't know. Inheritance tax? Forget it.
The leaflets cover only a tiny amount of the most widely used tax legislation.
If you want to get into the subtleties of CGT, IHT or even stock options you can research it yourself since most of the legislation can be found on the IR web site. However, much of it is obscurely written and non-obvious as to whether it applies in a given situation.
My accountant tells me that more often than not in these cases he has to point the officer to the legislation that applies and then get them to agree (in writing) that it is applicable to a case in point. There is plenty there for tax saving, but the layman won't find it for himself.
.andy
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rather than the monkey, but that applies to most oganisations.

me that he was the only reason I wasn't in prison. That remark and the notion that his fee should be a percentage of my turnover led me to sack him and deal with the IR direct. As I say, I found them very helpful. As a friend once said, "If you go to them, they take their hat off to you. If they come to you, they take your trousers off".
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On Thu, 7 Aug 2003 08:24:12 +0100, "stuart noble"

you are employed or self employed or have a one person business, it may be true that you can deal with the IR directly since there are a lot of people in that boat.
If your circumstances are more complex in terms of investments, ownership, directorships etc. then quite a lot of the applicable legislation is buried quite deeply and the typical IR people do not know about it. I could certainly research the legislation for myself and have the discussions with the IR, but it is much less expensive to get my accountant to do it for me.
.andy
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wrote:

Correct. And that's because the PCG insurances (including Route35 which I have) are nullified if you approach the Inland Revenue first.

I don't exactly know where you are getting your facts from. I attended a PCG meeting last night where the head honcho of Accountax gave us an informal presentation. The advice I heard was that the Inland Revenue practice a war of attrition - enquiries extend into years and so on. The Revenue virtually always take the view that you are caught by IR35 as the starting gambit.
However those IT contractors who have the balls to stand their ground invariably come out on top. Well over 100 cases have been taken to the commissioners - 1 was lost, all the rest won in favour of the contractor. And the one that was lost was felt to be a poor case anyway.

I'd go further - expect the Revenue to say "caught" every time.

The leaning is going on in Dawn Primarolos direction specifically. She is the minister who has responsibility for the Revenue.
Andrew
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'cos if you ask and don't like the answer then it's more difficult to get things reversed - organisations don't like to be seen to change their minds... the Revenue is no different. Insurance underwriters don't like to worsen their odds.

Then we're in complete agreement - I was referring possibly to the same article from one of the organisations, showing a tally of cases won/lost by the various review services and accountants. The Stutchbury case was the one that I knew had failed, but I did think that there were one or two others, couldn't find the exact numbers when I needed them. I did know that the vast majority found against the Revenue's position.. The recent decision reversal to "outside" in another case is a bit of a welcome development in this mess of uncertainty.

Yup. Which is why I wouldn't recommend the OP approaches the Revenue hoping, in innocence, for a fair, unbiased opinion. He'd get factually correct answers for clear cut things, but if there was an obvious way to avoid this tax then the likelyhood that he would be told about it is not high.

Grrr, Dim Prawn. A shining example of all that is wrong with incompetent career politicians.
-- Richard Sampson
email me at richard at olifant d-ot co do-t uk
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wrote:

So you see insurance actuaries as bookies as well....?
Somebody once told me that an actuary is somebody who found accountancy too exciting
.andy
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wrote:

I don't think I'm breaking any confidences to say that the opinion of the folks who know about these things was that Stutchbury made one fatal mistake.
That fatal mistake was that he chose to represent himself rather than enlist professional advisors to fight his corner. And when it came to the time of representing the case to the commissioners, when the professionals did get drawn in, the damage had already been done.
That said, it is widely rumoured that Stutchbury, being an ex-policeman and used to standing up in a court of law to give evidence, presented himself well so this shouldn't reflect badly on his presentation abilities. I'm not up to speed on the specifics but I think he may have failed in the area of being able to draw case law in to support his case, giving the Inland Revenue professionals an open goal to shoot at.
Which is why I've paid the money to put suitable insurances in place. If the Revenue ever point their guns in my direction I'm absolutely certain that I want a decent set of cannons pointing back.
Andrew
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snip
Without wishing to get involved in the issue of stamp duty which may or may not be payable (IANAL), and whilst suggesting that you see a solicitor on a 'first fifteen minute freebie' to find out, it maybe worth your while selling the house to your daughter for the maximum amount she can borrow and maybe consolidating her other debts.
Her repayments on the mortgage would probably be less than her accumulated outgoings at the moment and with the amount of equity available in the property this may well be the answer to your problem.
Of course this is speaking from the point of view of someone who doesn't know your daughter's financial circumstances. Often though, when you have a problem like this, it can be worthile to try and think that 'little bit bigger' than the immediate circumstances. It's been the downfall of many a person to borrow too little as opposed to too much.
If for instance she acquired a 40k mortgage and then had no other outgoings, would this help? If so,you could pay the stamp duty for her out of the proceeds of the sale.
Whatever you do, do this via a lawyer, have the searches done and get it right. The few hundred pounds you might save on a diy conveyance are just not worth it. Your daughter will need a solicitor too otherwise the B.S. won't go along with anything!
HTH
Patrick
p.s. also visit a mortgage broker. You'll be amazed at the deals on offer which might help you. Best of luck.
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Phil Norman wrote:

Phil,
What's your email address? I get an error when I try to send you a message regarding the above.
Rgds Richard
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