Hi everybody - I am still relatively new to this site and feel like I am picking everyone's brains and not giving much back at the moment - hopefully with a few more years under my belt, I should be able to!
I have a question about a freehold property completion.
the Solicitors have acted as a conduit for the transfer of funds to third party vendor of a property - £800k went via them - there is no invoice for this so I am creating a quasi invoice so I can pay this off - is this the right thing to do as the money has left the bank account to this supplier who usually supplies for the code of legal fees etc.
the rest of the money to this supplier is for associated search fees, VAT on those and other legal property invoiced items which I can allocate to confidently
BUT
I am going to Dr the fixed asset - property N/C and Cr the bank account for this transaction but I have stamp duty/land tax to allocate and no idea where to put it.
I am using sage accounts 50 - please help if you can
I think you do need to post the money paid to the accountant against their account (may be as a payment on account). Presuming at some point they will send you documentation on completion. That way there is some sort of audit trail, of where the money has gone.
You have to be careful with buying an asset that involves legal fees, searches, stamp duty, etc. as these become part of the asset and not an every day expense, so should be capitalised, and not included in the profit and loss calculation at year end/.
thanks for that - I think I may need to go re-visit it to make sure that the associated costs are not profit and loss like you said -I have made notes!
do you know where the stamp duty nominal code should sit - I dont' have one and will invent one but where in the company - Purchase, Expense, Asset, Liability?
Only a guess on this one Kate but as stamp duty is a direct cost involved in purchasing a property, I believe it will be part of the overall asset costs.
More in depth research required to give a more informed answer.
