Licensees could face fines under stamp duty legislation

Licensees could face fines and imprisonment if they overstate the value of their fixtures and fittings when selling their leased property, say property tax consultants NBW Crosher & James. The price of a public house or similar type of property will be split between goodwill, fixtures and fittings and land & buildings, say the tax specialists.

The definition of fixtures and fittings usually includes items such as heating and electrical installations, but under the terms of the new tax these are now to be included as part of the property.

The new Stamp Duty Land Tax (SDLT), which will come into force on December 1 will see licensees charged duty based on the length of the lease rather than one year's rent. That means that any licensees buying a leased pub will be faced with a huge tax bill.

The property tax consultants says the Inland Revenue who will be policing this new tax can impose large fines or even imprisonment for inaccurate or fraudulent returns that understate the amount of SDLT.

Tim Beresford, partner of NBW Crosher & James, said: "There is obviously a temptation for the buyer in these sorts of transaction to value chattels at their highest value.

"In the future however, greater attention will have to be paid to clarifying what is part of the property and what is not."

Related articles:​

Stamp duty reform will cost licensees an extra £11m a year, says BBPA (21 October 2003)

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