SDLT and the unknown unknowns…De-risk your practice

SDLT and the unknown unknowns…De-risk your practice

The end of the SDLT holiday was a relief for Julie, a hardworking conveyancer in a market town, relentless pressure from thankless clients, working weekends and evenings for months. Then of course, the SDLT returns and Land Registrations had to be dealt with- it didn’t end with the end of the holiday.

Six months later, there was the letter all conveyancers (or any solicitor for that matter). It started “You acted in on the purchase of 27 Randolph Crescent for our clients Mr. & Mrs. Sinclair. You completed a tax return following completion and failed to…..” The rest of it was predictable, allegations of carelessness, failing to explain matter or advise client appropriately. She remembered the transaction – it was just a straightforward with nothing memorable about it at all, one of dozens of similar transactions in that time. She barely remembered doing the SDLT return, but most of the information went straight from the firm’s Case Management System and submitted it for you – so how could it be wrong? Unfortunately, such systems sometimes just map to the HMRC online ‘calculator’ with no investigation of the things that need to be considered before completing a tax return.

Reading the letter with the allegations of negligence – failing to pay the Higher Rate as it turned out Mrs. Sinclair owned another property that her daughter lived in – inherited from her mother, she was stunned. How was she supposed to know? Unfortunately, the case ended up ruining her life for the next 6 months as it ground through the process of notifying insurers, dark looks in her direction at partner’s meetings, management time, and so on, not to mention worries about PI renewals. This and similar cases are happening all the time, since as the late Donald Rumsfeld pointed out, it’s not the things you know you don’t know, it’s the things you don’t know you don’t know that are a big problem.

Thankfully, there is now SDLT Compass which is the first and only accurate expert system which will ask all those questions you need to ask to self-assess this most complex of taxes. If you run all your matters through it, regardless of how ‘straight-forward’ you think it is, the system will pick up matters like Julie’s case and warn you, enabling you dodge the SDLT bullets each time.

The systemized way to look at any transaction regardless of how straightforward is seems as the start, is to look at each of four aspects. Firstly, ‘The Transaction’ – who is the buyer, what is their background, their relationships with other property owners and other properties anywhere in the world. Secondly, what is ‘The Consideration’ – it’s often NOT the figure on the transfer, and might include aspects that were never subject to the old Stamp Duty. Thirdly, what is The Property – looking at MDR, special statutory defined uses, derelict or development property, and so on. Finally, The Land, realising that the higher ‘wholly residential’ rates only apply to property that is exactly that – any other non-residential use of part of the property uses might mean less tax.

Our expert system, Compass, does all this for you, asking all the right questions appropriate to each situation. It either comes up with a Low Risk, indemnified result, allowing you to submit your return with no risk to you or your clients, or flags up the Unknown Unknowns so you can obtain advice to lock down the right payment of the right tax every time. Had Julie used Compass on the Sinclair’s matter her life would have been much easier and extra tax would have been paid at the time, with none of the problems she know has to deal with

See www.sdltcompass.co.uk for a demo and free 14 trial of our ground breaking approach to SDLT or contact Hannah Mackinlay at SDLT Compass – [email protected]

 

This article was submitted to be published by SDLT Compass as part of their advertising agreement with Today’s Conveyancer. The views expressed in this article are those of the submitter and not those of Today’s Conveyancer.

SDLT Compass

https://sdltcompass.co.uk/

SDLT Compass asks all the relevant questions before analysing deals to identify where reliefs or special rules may apply.

For standard transactions, Compass’s sophisticated algorithms provide an insured and indemnified Stamp Duty calculation of Stamp Duty Liability. For the more complex transactions, Compass ensures all the relevant information has been collected before referring the matter to our panel of experts, along with an overview of the potential issues identified to ensure that appropriate reliefs have not been missed and that the necessary conditions (including post completion conditions) have been complied with.

Compass is a one-stop application for all your SDLT needs, helping you to ensure that SDLT is calculated correctly for each of your clients first time, every time, and giving you the audit trail you need to prove it. Produce accurate SDLT numbers for your clients regardless of their circumstances or the type of property being purchased, avoiding the costs of:

  • Underestimated SDLT due to missed factors like additional properties, leading to loss of property and client dissatisfaction.
  • Overestimated SDLT leading to lengthy reclaim processes with HMRC and potential claims against your firm by the client.
  • Loss of professional reputation and higher PI insurance costs.

Compass allows your firm to avoid costly SDLT errors. It is a simple web-based interface and it is designed to produce a detailed audit trail to the specifications mandated in the latest CQS and Law Society tax guidance! Backed by 15+ years of experience, Compass analyses all 49 SDLT reliefs via 4 simple screens and provides 1 simple solution.

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Address

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Kibworth,
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Tel: 0333 305 0956
Email: [email protected]
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