house sale fixtures

Any thoughts on house contents becoming a "set" of chattels

Didn't find your answer?

I have an enquiry about the valuation and tax treatment of fixtures ( moveables) rather than the rest of a house sale .

Normally you'd itemise and deal with each asset to see if anything may look to have a gain and most will have losses possibly restricted to the £6000 deemed values but I wondered if anyone had experience of hmrc (im assuming potentially to their advantage ) claiming the furniture is being sold as a job lot "set" for the purpose of chattels treatment? Seems a big stretch too far.

Presumably the remaining house and fixed items would fall within the normal house sale contracts paperwork; but any thoughts on the extent of separate contract or just separate identification on completion statements of the value of furniture sold? Not sure from a legal point whether for some redress protection they do need reference within a standard house contract sale documents but separately identified .

Im concerned with big values and then potential enquires an "adjustment" might cause the parties issues with miss matched paperwork later on? 

Replies (15)

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By Paul Crowley
11th Apr 2024 09:57

Allocating a large sum to 'contents' has been a stamp duty avoidance scheme that is as old as the hills.
If you are worried about making a gain on the contents?

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By David Ex
11th Apr 2024 10:02

Not sure I understand what it is you’re asking but this might be helpful:

https://www.gov.uk/government/publications/chattels-and-capital-gains-ta...

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By Ruddles
11th Apr 2024 10:24

I've never seen HMRC take that approach, and it they tried to I'd tell them to go and sling one.

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By I'msorryIhaven'taclue
11th Apr 2024 10:39

Belt & braces, just ask your client to list the moveable furniture / chattels included in the sale; either as part of the contract (which these days goes into such minute detail as to list within its fixtures towel rails and light fittings) or as a subordinate contract.

Anything worth more than £6k individually? Or as a set (of eg table and chairs, or bedroom furniture suite)?

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DougScott
By Dougscott
11th Apr 2024 10:43

In my experience it would be included in the sale contract paperwork - property sale price and chattels sale price. Most chattels would be exempt from any potential CGT as they are wasting assets. You would normally itemise the chattels into headings - like louge furniture, range cooker, garden furniture, etc. HMRC are only likely to take an interest if the chattels appear over-valued.

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Replying to Dougscott:
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By I'msorryIhaven'taclue
11th Apr 2024 10:56

Dougscott wrote:

You would normally itemise the chattels into headings - like louge furniture...

Blimey... I haven't been to Ikea lately. Suddenly I want a toboggan chair!

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By More unearned luck
11th Apr 2024 12:58

A pendant writes:

Fixtures are as much a part of the fabric of a building as are the bricks and mortar, so are part of the land.

Fittings are things attached to land (including a wall that is part of the land) without the necessary degree of permanence and attachment that would make them a fixture.

Moveables as the name suggests are neither fixed nor fitted to anything.

What you are suggesting is that it is arguable that chattels (and fittings) form a set merely because they are owned by the same person and kept under the same roof. It sounds like a very poor augment.

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Replying to More unearned luck:
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By FactChecker
11th Apr 2024 13:26

Quite ... I was thrown by OP's opening salvo:
"I have an enquiry about the valuation and tax treatment of fixtures (moveables)" - as in I can't imagine what is both a fixture and moveable at the same time (at least without being deconstructed and typically to the detriment of the property).

At the purely practical level ... what no-one has mentioned (but would certainly cross the mind at HMRC) is the scale of the amount claimed to be chattels vs amount for property sold (basically materiality).
If a £300k terrace house contains a Mae West lips sofa designed by Salvador Dalí (and valued 5 years ago at £480,000), then selling the combined lot for £629k doesn't mean the house falls out of SDLT ... if that's what OP is on about?
Or is this thread meant to be about CGT, or IHT, or ...?

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Replying to More unearned luck:
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By I'msorryIhaven'taclue
11th Apr 2024 13:43

The OP asks specifically about furniture valuation. The OP seems aware that these are chattels.

But I see where you're coming from... his heading / strapline asks about fixtures and within the body even states "tax treatment of fixtures (moveables)".

OP, what's included in this "big values" furniture itinerary? Are there any fitted wardrobes, fitted dressers, oak panels or fireplaces involved?

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Replying to I'msorryIhaven'taclue:
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By markmorley
16th Apr 2024 16:44

Hi Thank you everyone there were a couple of themes and my sloppy reference to the moveable element of fittings (as distinct from fixed fixtures).
Actually i am lead to believe the client is trying to allocate £275k yes I know ! made up of both fixed ( to be incorporated in building values ) and still substantial moveable furniture and furnishings. all listed in detail.- I've have warned them of the inviting hmrc enquiries for them and the buyer and guidence that HMRC will judge values irrespective of your contracts in assessing stamp duty .

1) I was expecting everyone to say other than clearly defined sets of say crockery "the contents " would be considered as an accumulation of individual items most of which I'm expecting to have substantially wasted value ( unless client can evidence higher second hand values / potential for gains). Am aware of £6k 5/3rds chattels limits both ways. However,as this was the third sale as is, I've been presented with this month, I just wondered if HMRC had ever argued contents = a set.
2) that which you've collectively answered can be in sale contract (with lists ) or separate .
3) However i was wondering if anyone know whether say including within the sales contract they would benefit from legal protection or standard rules between the parties and whether excluding them from the land sale contract offered only sale of goods act protection. if applicable. eg

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Replying to markmorley:
paddle steamer
By DJKL
16th Apr 2024 18:06

Reminds me years ago of a client trying to be cute selling a business with under the table key money- guess which element did not get paid.

If you are buyer or seller with two connected transactions making sure they are fully connected, one cannot be done without the other, is crucial to avoid being shafted.

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Replying to markmorley:
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By Tax Dragon
16th Apr 2024 20:16

At £275k does VAT become an issue? If there's a profit, maybe even income tax! Seems just as plausible, maybe more so, than a 'set of things' type argument.

Btw I love how Mul seems to have stolen part of Dougscott's keyboard - hence "louge" and "pendant".

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Replying to Tax Dragon:
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By FactChecker
16th Apr 2024 21:42

I preferred Mul's "very poor augment" which seemed almost apposite. :=)

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Replying to I'msorryIhaven'taclue:
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By markmorley
16th Apr 2024 16:44

Hi Thank you everyone there were a couple of themes and my sloppy reference to the moveable element of fittings (as distinct from fixed fixtures).
Actually i am lead to believe the client is trying to allocate £275k yes I know ! made up of both fixed ( to be incorporated in building values ) and still substantial moveable furniture and furnishings. all listed in detail.- I've have warned them of the inviting hmrc enquiries for them and the buyer and guidence that HMRC will judge values irrespective of your contracts in assessing stamp duty .

1) I was expecting everyone to say other than clearly defined sets of say crockery "the contents " would be considered as an accumulation of individual items most of which I'm expecting to have substantially wasted value ( unless client can evidence higher second hand values / potential for gains). Am aware of £6k 5/3rds chattels limits both ways. However,as this was the third sale as is, I've been presented with this month, I just wondered if HMRC had ever argued contents = a set.
2) that which you've collectively answered can be in sale contract (with lists ) or separate .
3) However i was wondering if anyone know whether say including within the sales contract they would benefit from legal protection or standard rules between the parties and whether excluding them from the land sale contract offered only sale of goods act protection. if applicable. eg

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paddle steamer
By DJKL
16th Apr 2024 18:01

I appreciate in Scotland so maybe different.

The only time I bought house contents as well as a house was in 1985, there we sorted the contract re the house purchase and had a separate exchange of solicitors letters re the contents. The house cost me £15,400 the contents £300. I later sold house and most contents to my father in 1989 and some of the older furniture like wardrobes/drop leaf tables etc was gifted to the buyers in 2013 post his death.(Brown furniture was totally out of fashion by 2013)

I do still have a large hinged railway type trunk that was in the house, I also inherited the odd accountancy book with the purchase and still have Merrett & Sykes "The Finance and Analysis of Capital Projects"-1963 and Spicer and Pegler's "Practical Auditing " 1954, both acquired within the £300 contents (There was an ICAEW book on Standard Costing but I think that got heaved, it is certainly not in my bookcase here)

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