SRA issues SDLT Scheme Warning
The SRA have issued a warning to all solicitors voicing their concerns as to the promotion or facilitation by solicitors of stamp duty land tax schemes.
The warning, which is aimed at anyone planning to become involved in the promotion or facilitation of schemes intended to avoid or reduce stamp duty land tax, is in relation to any type of property but in particular is addressed to those involved in residential property transactions.
The warning follows a similar warning from HM Revenue and Customs (HMRC). They have warned that “where HMRC find property sale arrangements that have been artificially structured to avoid paying the correct amount of SDLT these will be actively challenged, through the courts where appropriate”.
HMRC has also warned that, in general, these schemes do not genuinely provide the savings their promoters claim. The Times newspaper has reported that the loss to the HMRC “is conservatively estimated at £500 million but some tax specialists believe that the true figures could be more than £1 billion”. If HMRC is successful in challenging an SDLT scheme, buyers could be liable to pay the whole of the SDLT plus interest and potentially a penalty.
The SRA have advised that solicitors should pay particular regard to the requirements of the SRA Code of Conduct, in particular the principles and regulations relating to:
- best interests of the client,
- behaving in a way that maintains the trust the public places in you and the provision of legal services.
The SRA’s comprehensive guidance can be found on their web site at www.sra.org.uk/solicitors/code-of-conduct/guidance/warning-notices/stamp-duty-land-tax-schemes–warning-notice.page