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Should conveyancing solicitors advise on SDLT?

Or fob it off 'to your tax advisor'

For the second time this year I've had a client visibly frustrated with me because I couldn't advise on their SDLT situation, after the client had been advised by their conveyancer to 'check with your tax advisor on your SDLT position'.

I'm obviously aware of it, and some of the ins and outs of the additional 3% charge, but when a client says 'we're thinking of getting married to avoid the additional 3%' I'm definitely going to put my hand up and advise them to see a specialist.

The question is, shouldn't a reasonably competent conveyancing solicitor be across this rather than fob it off to 'your tax advisor'.  Or is this really a specialist area beyond the expertise of most day to day conveyancers?

The next one that refers one of my clients back to me I think I'm going to get very shouty at.

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13th Aug 2018 14:08

A very good question. Clearly this judge in para 45 does not think a conveyancing solicitor should even be advising on anything simple that per HMRC does not require a tax specialist (see para 17(b)) re property tax and that a tax specialist is needed.

http://financeandtax.decisions.tribunals.gov.uk/judgmentfiles/j10584/TC0...

As for getting married to avoid the 3% SDLT surcharge - a tax specialist would never advise that and indeed would probably advise the exact opposite!

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13th Aug 2018 14:18

FWIW, I think it is very clearly a job for the person dealing with the conveyance. They are, presumably, the one dealing with the SDLT forms and payments.

I suppose it might help a bit, in future, to make clear in your Ts & Cs that your services do not include SDLT advice. Probably wasting your time if your clients are that dense that they cannot distinguish between (very) different taxes.

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to Accountant A
13th Aug 2018 14:32

Not that I disagree with you, but on that (simplistic) view conveyancing solicitors should also be responsible for advising their vendor clients on the need for NRCGT returns etc. (i.e. what's fundamentally different from a professional adviser point of view between a property purchase tax (SDLT) for their purchaser clients and a property sales tax (NRCGT) for their vendor clients as they are both self assessment taxes and so there are penalties etc. for non-compliance in both cases?), yet for some reason the above judge suggests that's not the case.

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13th Aug 2018 14:30

We get a lot of this. Conveyancing solicitors deal with SDLT day in, day out, so they should mug up on the subject and deal with it themselves, not abdicate their responsibilities to their client by fobbing it off to accountants who never deal with it. SDLT specialists are not easy to find. I think half the problem with solicitors as a breed is that they won't stick their neck out and advise the client, whereas accountants will generally advise the client but put in caveats.

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to jon_griffey
17th Aug 2018 10:30

A newly-formed client company bought residential property for short-term lettings for holidaymakers. The company had registered for VAT so I advised them that they would have to account for VAT on the income from such. I also advised them to register for ATED asap; the solicitor had NOT done it.

The company asked the solicitor to complete the ATED for them. He was adamant that they did not need to file the return. I was just as adamant that they did. The solicitor told the company that he was right and I was wrong. After two months, with me pushing all the time, he finally acknowledged that the Return was required. Meanwhile the company was at risk of a penalty of £1,000.

I visited the company and filed the ATED from their offices. I also told them to pursue the solicitor for the penalty. The company escaped the penalty for some reason!

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17th Aug 2018 10:11

'we're thinking of getting married to avoid the additional 3%'

Don't.

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17th Aug 2018 10:27

dealt with 2 divorces this year the lawyers seem to know nothing about CGT its ridiculous and are always passing the buck

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By birdman
17th Aug 2018 10:40

We're moving house, but buying before we sell, with short-term finance to cover. Of the three quotes from solicitors, only one got the stamp duty correct (we pay the extra 3% and reclaim once we've sold our current home). The purchase has now moved on, and we were sent the SDLT1 form to sign. There is land with the purchase, there are 4 separate titles to transfer, but only the one with the house was in the form, and no sign of the necessary SDLT3 forms. I am now a SDLT expert - well at least I know more than the firm who is supposedly advising me!

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17th Aug 2018 13:32

sadly as this post shows solicitors are not up to SDLT and as I have had a few enquiries I am thinking of increasing my knowledge in an area that is becomming complex along with ATED.

However tax protection companies eg Taxwise now have SDLT specialists so it maybe a good time to start using them.

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17th Aug 2018 13:38

I've had solicitors ask me even though that very same solicitor is dealing with the SDLT. It's even worse here in Wales because we now have LTT and the Welsh Revenue Authority who administer LTT seem to know nothing about their own tax.

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17th Aug 2018 15:59

As a solicitor I feel I have to comment. Do you want conveyancing solicitors to undertake your income from property work or your CGT disposal work ? Both are related to property transactions. Would you expect the conveyancing solicitor to deal with these taxes too?
SDLT is a tax and many solicitors who do not specialise in tax exclude tax advice from their retainer. Quite right too if they do not hold themselves out to be tax specialists.
I don't understand why some clients use accountants to undertake estate administration when accountants are not lawyers but they do.
The world has changed and we all seem to want to cherry pick what we do and what we don't do leaving the client the choice of adviser. Don't be surprised if they choose you.

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By JWB
17th Aug 2018 16:33

There are too may acronyms in this post for me :)

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By TaxSpud
17th Aug 2018 16:43

Re Lawskills first point I would expect to do property income tax and CGT as I fill in the associated tax returns, but as the solicitor files the SDLT returns surely they should know what they are doing?
Of course like many other advisors clients do ask our advice on SDLT and we do our best to answer it, and I seem to be doing more and more CGT divorce work which I wouldn't expect a solicitor to do.

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17th Aug 2018 16:48

Anyone familiar with the SDLT Q&As here will know that very many people on this forum have no clue whatsoever about even supposedly simple SDLT issues (despite sometimes purporting to be SDLT experts e.g. PNL). Unlike in the distant past, these days it's full of nooks & crannies and you should always try get an SDLT specialist to confirm the SDLT due. Just look at the SDLT Q&As on Zoopla with John Shallcross re the 3% SDLT surcharge to give you an idea of how complex just that bit is.

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17th Aug 2018 17:34

absurd attempt at self justification by lawskills. First accountants deal with tax on a historical basis not on an immediate basis for example we have to find out historical details of cost of assets sold etc, this is not required for SDLT and second lawyers have legal privilege on tax accountants do not. if all solicitors want to opt out df tax advice then give accountants privilege.

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20th Aug 2018 15:35

The solicitor I use asks 1) if client wants them to submit the SDLT form. If yes, they send a supplementary questionnaire to ascertain the circumstances of the property purchase, and therefore the liability, if any, to pay the tax. Never had any problems.

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