Stamp Duty – Where the consideration for the conveyance or transfer on sale of a property includes an amount attributed by the parties to fixtures and fittings, that amount will not normally be charged to stamp duty provided the fixtures and fittings pass by delivery and are not covered in the document.
Case law provides that where assets of different character are agreed to be sold for one consideration for the whole, any apportionment between the chargeable and non-chargeable property must be a bona fide one. This is taken to mean that it must be based on the commercial value of the property concerned.
A contract for sale based on a false apportionment may be unenforceable because of its improper intent and can therefore have more far reaching consequences. In addition, the Inland Revenue may treat such a contract as an attempted fraud on the Revenue, which is a criminal offence.
The Stamp Office of the Inland Revenue reports that during in recent years, there has been a steady increase in the number of cases where the amount of consideration attributed to items claimed to be fixtures and fittings is more than a small percentage of the total consideration. Apparently, but not surprisingly, this is especially the case where this brings the chargeable amount just below the £250,000 or £500,000 thresholds.
Warning from The Stamp Office
The Stamp Office has warned that in cases where it appears that an excessive amount of the consideration has been artifically attributed to non-chargeable items, a full inventory and breakdown of the consideration will be required by the Stamp Office.
The Stamp Office does not provide a comprehensive list of items which are accepted as fixtures and fittings, since many cases need to be considered on their own merits and case law is evolving in this area all the time. However, we are advised that items which will generally be accepted as fixtures and fittings include – carpets, curtains, light shades, pot plants, free-standing kitchen white goods and portable electric/gas fires.
Items which are generally unacceptable are – fitted kitchen cabinets and cupboards, fitted kitchen white goods, fitted bathroom sanitary ware, central heating systems, plants growing in the soil, central heating systems and gas fires connected to a piped gas supply.