US based vendors want an additional £10k owing to Brexit!
Discussion
Just stinks of total BS to me.
If they have a whopper tax bill at 1.46 then they have a whopper tax bill at 1.46.
It is nothing to do with the house then.
If that tax bill were dependent on the house value (i.e. some sort of CGT) then it would obviously be lower since the CAPITAL GAIN IS LOWER (owing to FX)!!!
Of course their equity is down - that's the whole point, and that is TOUGH s
t.
Cry me a fricking river...
And lastly, obviously the tax bill (if it even exists) can't be that big because they can happily pay it using RENT somehow.
SMOKING.
CRACK.
Feel free to forward this to the vendors.
Walm (ex-US tax payer, financial analyst, sniffer of BS)
If they have a whopper tax bill at 1.46 then they have a whopper tax bill at 1.46.
It is nothing to do with the house then.
If that tax bill were dependent on the house value (i.e. some sort of CGT) then it would obviously be lower since the CAPITAL GAIN IS LOWER (owing to FX)!!!
Of course their equity is down - that's the whole point, and that is TOUGH s
t.Cry me a fricking river...
And lastly, obviously the tax bill (if it even exists) can't be that big because they can happily pay it using RENT somehow.
SMOKING.
CRACK.
Feel free to forward this to the vendors.
Walm (ex-US tax payer, financial analyst, sniffer of BS)
^
Just in the process of emailing them.
For whatever reason, they seem intent on pulling out and putting up for rent again. Whether this is owing to greed, stupidity or ignorance is unclear. Regardless, the outcome is the same.
Final email to the estate agent this morning asking for clear confirmation either way.
Edit to add, these are the original emails the estate agent forwarded to me from the vendor.
t?
Just in the process of emailing them.
For whatever reason, they seem intent on pulling out and putting up for rent again. Whether this is owing to greed, stupidity or ignorance is unclear. Regardless, the outcome is the same.
Final email to the estate agent this morning asking for clear confirmation either way.
Edit to add, these are the original emails the estate agent forwarded to me from the vendor.
vendor said:
We've woken up to yet more weakening of the pound, which regrettably directly impacts our tax position in the US (it's a complex IRS piece of tax legislation, but essentially the value of the usd vs sterling at the time of sale directly affects what we owe).
We can no longer afford to sell at that price and are seriously considering withdrawing and continuing to rent it.
I'm sorry to put the buyer in this position, but we'd need another £10,000 in order to comfortably proceed.
Please can someone call (not email) him to explain this.
We can no longer afford to sell at that price and are seriously considering withdrawing and continuing to rent it.
I'm sorry to put the buyer in this position, but we'd need another £10,000 in order to comfortably proceed.
Please can someone call (not email) him to explain this.
vendor said:
We appreciate your comments regarding the volatility of the housing market, and have considered these, however the value of the pound for us has considerable ramifications for us, most obviously for our US tax obligations (the current fluctuation has increased our tax bill massively) but also the value of the proceeds of the sale should we decide to convert to USD. It's just not a risk we feel comfortable taking at the moment, as with the English conveyancing system's protracted nature, there is additional potential downside FX risk for us - we have no idea where it will settle on completion date.
I realise the buyer may pull out entirely, but I'd like to offer him the opportunity continue to proceed at the higher price. Please offer him our apologies - we did not foresee a 'leave' vote and its resultant financial consequences, but like everyone else, we need to take action to mitigate our position.
Still bullsI realise the buyer may pull out entirely, but I'd like to offer him the opportunity continue to proceed at the higher price. Please offer him our apologies - we did not foresee a 'leave' vote and its resultant financial consequences, but like everyone else, we need to take action to mitigate our position.
t?Edited by g3org3y on Monday 4th July 09:18
vendor said:
We've woken up to yet more weakening of the pound, which regrettably directly impacts our tax position in the US (it's a complex IRS piece of tax legislation, but essentially the value of the usd vs sterling at the time of sale directly affects what we owe).
This is likely true and what I have been saying all along.Essentially it sounds like a simple CGT calculation.
i.e. We made £100k (sterling) therefore AT THE TIME OF THE SALE we owe 100/1.35 or 100/1.46 or whatever.
OF COURSE WHAT THEY OWE CHANGES.
But FFS - CGT is a PERCENTAGE of the gain.
They are simply complaining that their gain is smaller.
The tax will be commensurately smaller surely.
Look, I am no international tax expert but what they have written above makes sense (i.e. it is the FX rate AT THE TIME OF THE SALE that matters) and all they are complaining about is... OUR EQUITY IS SMALLER BOO HOO.
Oh and yes they may well have an unrelated massive USD tax bill - SO WHAT!!??
They were doing what I always advise against - relying on the house equity to pay that bill and taking a MASSIVE FX punt.
Their debt was in one currency and they were relying on a different currency to pay it.
They gambled and they lost.
Pure and simple.
Look if you really like the house, pay the extra and buy it.
But their sob story is exactly that. They are just trying it on to mitigate their failed gamble.
Woe is them.
They were doing what I always advise against - relying on the house equity to pay that bill and taking a MASSIVE FX punt.
Their debt was in one currency and they were relying on a different currency to pay it.
They gambled and they lost.
Pure and simple.
Look if you really like the house, pay the extra and buy it.
But their sob story is exactly that. They are just trying it on to mitigate their failed gamble.
Woe is them.
walm said:
essayer said:
They want to sell. They just want an extra £10k, which is a figure they have seemingly plucked from mid air. Like every vendor that's ever done it, there's some BS excuse.
This 100%.It's official. Vendors have pulled out.
I've contacted the mortgage company and the solicitor. Ball ache but these things happen. Wife and I are annoyed but we'll get over it. We'll be keeping an eye on the housing market over the upcoming months. It'll be interesting to see how things pan out.
Thank you to all who have contributed to the thread.
I've contacted the mortgage company and the solicitor. Ball ache but these things happen. Wife and I are annoyed but we'll get over it. We'll be keeping an eye on the housing market over the upcoming months. It'll be interesting to see how things pan out.
Thank you to all who have contributed to the thread.
And do keep us updated if you hear more from them...g3org3y said:
It's official. Vendors have pulled out.
I've contacted the mortgage company and the solicitor. Ball ache but these things happen. Wife and I are annoyed but we'll get over it. We'll be keeping an eye on the housing market over the upcoming months. It'll be interesting to see how things pan out.
Thank you to all who have contributed to the thread.
Sorry to hear that but I honestly think you dodged a bullet. Let someone else be the fall guy to their muppetry. I've contacted the mortgage company and the solicitor. Ball ache but these things happen. Wife and I are annoyed but we'll get over it. We'll be keeping an eye on the housing market over the upcoming months. It'll be interesting to see how things pan out.
Thank you to all who have contributed to the thread.
http://www.taxadvisorypartnership.com/blog/us-tax/...
Although it doesn't help your position OP this may shed some light on the issue they are facing. Broadly there are two potential charges on the sale of a property in the US:
1) "Straight forward" capital gains which works in a similar way to the UK.
2) Foreign exchange rate gain on the redemption of a foreign currency mortgage.
From what they are saying they will now be caught on the latter.
Although it doesn't help your position OP this may shed some light on the issue they are facing. Broadly there are two potential charges on the sale of a property in the US:
1) "Straight forward" capital gains which works in a similar way to the UK.
2) Foreign exchange rate gain on the redemption of a foreign currency mortgage.
From what they are saying they will now be caught on the latter.
Bit of an update:
As mentioned the house was put on the rental market (with the same estate agents who were doing the sale). It has been advertised from the day of the deal falling through.
Looks like they've not had any interest as it's still on the rental market and today they've dropped the rent by £100/month (now £1650/month).
Oh well.
As mentioned the house was put on the rental market (with the same estate agents who were doing the sale). It has been advertised from the day of the deal falling through.
Looks like they've not had any interest as it's still on the rental market and today they've dropped the rent by £100/month (now £1650/month).
Oh well.
g3org3y said:
Bit of an update:
As mentioned the house was put on the rental market (with the same estate agents who were doing the sale). It has been advertised from the day of the deal falling through.
Looks like they've not had any interest as it's still on the rental market and today they've dropped the rent by £100/month (now £1650/month).
Oh well.
Just sit tight and wait for the phonecall. I waited out my seller for 3 months back in 2008 before he came back to me and asked if my offer was still on the table. As mentioned the house was put on the rental market (with the same estate agents who were doing the sale). It has been advertised from the day of the deal falling through.
Looks like they've not had any interest as it's still on the rental market and today they've dropped the rent by £100/month (now £1650/month).
Oh well.
Interesting situation as a family member and her partner agreed a purchase in May several weeks before Brexit. This was a property in south London.
Following Brexit and before any exchange of contracts etc they reduced their offer by nearly 10%. The vendor was going to the US after the sale.
With a period of going to and frow, the agreed price dropped by 5% (approx 30K). This was despite their agent claiming all their sales agreed were going through at pre-Brexit prices!
Following Brexit and before any exchange of contracts etc they reduced their offer by nearly 10%. The vendor was going to the US after the sale.
With a period of going to and frow, the agreed price dropped by 5% (approx 30K). This was despite their agent claiming all their sales agreed were going through at pre-Brexit prices!
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