How much Stamp Duty will I pay?

Posted on 1st July 2020

Our Conveyancing Solicitors in Preston are often asked about how much Stamp Duty will be payable on the purchase or transfer of a property however people often don’t realise that Stamp Duty may be payable on Fixtures. Therefore, it is important to be aware of the difference between fixtures and chattels.

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What is the stamp duty calculation?

The government has a calculator which can be used for basic Stamp Duty calculations but you should also be aware that HMRC state that Fixtures will attract Stamp Duty as well.

What is a Fixture?

HMRC use a fairly basic criteria to determine whether an item is a fixture. They state that an item will considered a fixture if it is sufficiently annexed to the land and cannot be removed without causing significant damage. Anything not sufficiently annexed will be classed as a chattel.

For Stamp Duty purposes fitted kitchens, cupboards, sinks, AGAs and wall-mounted ovens, fitted bathrooms, central heating systems, intruder alarm systems, external plants and shrubs or trees growing in the soil that form part of the land will be classified as fixtures.

Whereas carpets (fitted or otherwise), curtains, blind, free-standing furniture, most white goods, electric and gas fires (provided they can be disconnect from a power supply without causing damage to the property), light shades and fittings, and potted plants are considered by HMRC to be chattels.

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When does a Fixture attract Stamp Duty?

Any money that is paid for anything that is not a fixture will not attract stamp duty. So, if you were to purchase a property for £250,000.00 and whilst viewing the property you saw a chest of draws and a free-standing wardrobe that the Seller said they would leave in the property for an additional £3,000.00, would stamp duty be payable on the figure of £253,000.00? The answer is no, the chest of draws and free-standing wardrobe would be classed as chattels. However, if the draws were fitted and the wardrobe built in, then the HMRC would hold both items to be fixtures and then Stamp Duty would be payable on the full £253,000.00.

Can the HMRC investigate how much Stamp Duty was paid?

Yes. HMRC has a right to investigate the amount of Stamp Duty that was paid at the time of the transaction, they have this right so that they can check that parties have not purposefully or inadvertently defrauded the Inland Revenue.

In a recent case, the HMRC found that the motor unit to operate garage doors and a workstation were fixtures. In this matter, the property was purchased for £258,000.00, £8,000 of which was stated to be chattels so the Stamp Duty was calculated on the £250,000.00. Unfortunately, HMRC successfully argued their case with regards the garage doors and workstation so the Stamp Duty was calculated on the figure of £258,000.00.

MG Legal’s Property Solicitors in Lancaster have extensive knowledge of the conveyancing process, including dealing with freehold and leasehold sales and purchases, new build purchases, help to buy transactions, transfer of equity, remortgages and general property advice. Contact us now for a quote via contact enquiries@mglegal.co.uk or call Lancaster 01524 581306, or Preston 01772 783314, or our property solicitors in Garstang on 01995 602 129.