Stamp Duty - Preston Solicitors

The case of Orsman v HM Revenue and Customs (2012) is a reminder to us all regards the the pitfalls of trying to avoid stamp duty fees.

The details of the case are;

Miss O agreed to buy a property at £250,000 and make a further payment of £800 for fitted units in the property's garage.

Stamp Duty was paid on the £250,000 at the standard 1% rate. ie. She paid £2,500 in tax.

If she'd paid the vendor £250,800 she would have had to have made a payment of 3% of the total amount equating to £7,524. Hence it was in her interests to list the £800 units as a separate transaction to the house purchase.

Sadly HMRC investigated and decided that the fitted units were part and parcel of the property saying they were fixtures and not "chattels". Therefore they were part and parcel of the house.

Miss O appealed to the First Tier Tax Chamber but her case failed.

She had to pay court costs, plus legal fees, and lost in excess of £8,324.

The moral of the case is to speak to your conveyancing solicitor prior to agreeing any deals that have stamp duty implications !  

We're the experts and you pay us to safeguard your interests.

Ellen Court Partnership

Preston Conveyancing Solicitors

Tel: 01772 882 888