HRC fires warning over Stamp Duty cheating
Monday 20th February 2012
Conveyancers have been put on red alert not to become involved in Stamp Duty avoidance schemes – for example, where residential property deals are structured to avoid the tax.
Such schemes could be sophisticated ones, as advertised on the internet, or simpler ones whereby, for example, buyers pay the agent’s fee even where the agent was acting for the seller, so that the property price is brought down below, typically, the £1m threshold.
The warning, from the Solicitors Regulation Authority, comes after HMRC made it known that it is actively scrutinising and challenging all property sales where it looks as though there could have been efforts to mitigate Stamp Duty Land Tax.
If HMRC successfully challenges, buyers could be liable to pay all of the duty, plus interest and a penalty. Solicitors could also face punishment, as if they knowingly provided information in support of a tax return that is incorrect, HMRC could impose a penalty of £3,000 per submission.
Richard Collins, SRA executive director, said: “In view of the level of concern on the part of HMRC and the fundamental importance of integrity in the provision of legal advice, we will look very closely at the conduct of any firm actively involved in these schemes.”
David Gauke MP, the Exchequer Secretary, said: “I welcome the work that the SRA is undertaking to ensure solicitors are not abusing their positions of trust, and their obligations to all their clients when advising on and conveyancing property.
“HMRC is investigating schemes notified to it and also tracking down other users of schemes to challenge apparent deficiencies in returns submitted.
“HMRC will seek payment of the full amount of SDLT in all such appropriate cases.”
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