A rebuke from the Solicitors Regulation Authority (SRA) has been accepted by a solicitor involved in conveyancing transactions that resulted in the non-payment of £2 million in stamp duty (SDLT).
Kelly Buckle-Fleming was a former director at the now closed Dixon Law in Leeds, which had acted in some 47 transactions over a two-and-a-half-year period using two SDLT avoidance schemes – some of which Buckle-Fleming had been involved in.
Involvement in the SDLT schemes has been the reason for many solicitors facing disciplinary action and Buckle-Fleming is just the most recent.
One scheme being used included deeds of novation. Purchaser clients in this instance became ‘substitute purchasers’ subsequent to the novation of agreements between a corporate third party body and the seller.
Another involved option agreements, where seller clients produced said agreements permitting a third-party corporate body an option to buy the property between the fifth and 21st anniversaries of the sale at a pre-negotiated price.
In advice letters to clients, the firm identified the possibility of lenders making enquiries into the presence of the tax scheme as well as the prospect of this prompting their willingness to lend. This was according to a regulatory settlement agreement, published by the SRA.
Breaching her duty to her lender clients, Buckle-Fleming failed to inform them of the structure of the transactions, as well as that the purchaser client was using an SDLT scheme.
The SRA stated: “The result was that the lender clients were not given material information to enable them to reach an informed decision as to whether to proceed with the mortgage offer or renegotiate terms.”
Buckle-Fleming also agreed that she had acted where a conflict of interests existed, between the purchaser and the lender clients.
The solicitor had mentioned during mitigation, that Dixon Law had ceased in dealing with conveyancing transactions which involved SDLT avoidance schemes and that she did not possess sole conduct of the transactions. This was following the warning notice given in February 2012 by the SRA.
Ms Buckle-Fleming also agreed to pay a £1,000 fine and £3,000 in costs in addition to the rebuke acceptance.