Relatus can provide your client with written opinions and draft a full disclosure which will not only ensure the correct amount of SDLT is paid but also protects you and your clients should HMRC issue an inquiry or discovery assessment.
SDLT is an area of taxation with many potential pitfalls for those who are not
experienced or up to date with HMRC’s current approach and guidance. A concern recognised by the
Law Society who published an article in August 2022 stating that:
“A solicitor who does not have the necessary specialist knowledge of tax should not advise on it and may need to advise clients to obtain specialist SDLT advice, especially in relation to higher risk transactions.”
Residential properties can attract a different rate of SDLT depending upon the property being purchased and the purchasers themselves, there are also a number of reliefs available which can reduce your clients’ SDLT liability. Despite this HMRC's SDLT calculator provides only a basic calculation of the amounts due.
The Legislation in relation to SDLT lacks clarity, and there are very few Upper Tribunal precedential authorities. There are several conflicting 1st Tier Tribunal decisions (non precedential) and HMRC’s own guidance and approach is constantly evolving and exhibits inconsistency with previous guidance. Despite this uncertain landscape HMRC are aggressively challenging SDLT1 returns especially where reliefs are claimed. An adverse outcome will incur additional tax payments, interest and the possibility of penalties, placing the purchaser at risk of financial loss and those responsible for the preparation and submission of the return at risk of a negligence action.
Beyond the usual 9 month compliance period, an SDLT return is also subject to a possible discovery assessment which could be raised up to 6 years after the purchase date. Very few solicitors would know how to use a full disclosure to protect their clients from a discovery assessment.
Relatus have a great deal of experience in advising taxpayers and professionals as to the correct amount of SDLT both prior to purchase and after the event. We are also experienced in dealing with compliance checks and appeals to the Tax Tribunal. As a result, we are very conversant with the current definitions, guidance, criteria and case law applied by HMRC. We have also successfully challenged HMRC at Judicial Review resulting in their decision being overturned and our being awarded costs.
We are able to advise in relation to SDLT in general to include linked transactions, multiple dwelling relief, mixed use transactions, uninhabitable claims, the higher rates for companies and individuals and the non-resident rates of SDLT as well as HMRC’s practices and approach to compliance cases.
We will work with you and your clients to provide an initial assessment of the correct amount of SDLT payable and can then go on to prepare a detailed written opinion and a full disclosure report supporting the SDLT return with reference to legislation, case law and guidance.
If you are interested in receiving advice or written opinion for any of your clients transactions please contact us.
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