STAMP DUTY, FIXTURES AND CHATTELS

The distinction between fixtures and chattels is important for the calculation of Stamp Duty Land Tax in all land transactions. The reason is whereas Fixtures attract stamp duty, Chattels do not. The basic criteria used by HMRC to determine which category an item falls under is that a fixture is sufficiently annexed to the land and cannot be removed without causing significant damage. Anything which is not a fixture and does not satisfy the above criteria is therefore a chattel.

HMRC normally regard the following as fixtures and fittings: fitted kitchen units, cupboards and sinks, AGAs and wall-mounted ovens, fitted bathroom sanitary ware, central heating systems, intruder alarm systems, external plants, shrubs or trees growing in the soil that form part of the land. On the other hand, items such as carpets (fitted or otherwise), curtains and blinds, free-standing furniture, kitchen white goods, electric and gas fires (provided that they can be removed and disconnected from the power supply without causing damage to the property), light shades and fittings (unless recessed) and potted plants are considered by HMRC to be chattels.

Consideration paid for anything that is not a true fixture does not attract stamp duty. It is prudent that for a buyer to ensure that price paid for chattels constitute a fair and genuine estimate and it is not inflated, as HMRC has the right to make enquiries about the price of chattels paid on completion to ensure that the parties have not purposefully or inadvertently defraud the Inland Review.  In a recent case, the property was purchased for £258,000 of which £8,000 was stated to be fittings and fixtures. However, HMRC successfully argued that the motor unit to operate garage doors and a workstation were fixtures and chargeable to SDLT. The purchase price of the house was therefore £250,800.

It was announced on 29 October 2018 that the time period for payment of Stamp Duty Land Tax would be reduced from 30 to 14 days as of 1^st March 2019.

By Alireza Nurbakhsh dated 6th June 2019