Paying stamp duty after completion - something fishy?

dfarry

So far I can't complain about my solicitors they have been doing a great job....but...I opted to complete the SDLT myself and reading through the notes it seems like I have 30 days to make my stamp duty payment to the Inland Revenue...and they have given me a number of ways to pay.

However my solicitor has informed me to return the form to them, (which i already knew I would have to do)....but they will make the payment directly (and presumably expect the money from me in advance).

Now call me cynical or suspicious but could they hold onto this money for upto 30 days after completion and earn interest from it.... I would not be happy about that especially as I have been looking after the stamp duty myself. I think I will have a chat with the inland revenue about this and then discuss with my solicitor.

Incidently I have a offset mortgage so I am trying to hold onto as much cash as possible for as long as I can.

Raspberry_Ripples

That is correct - you have 30 days in which to pay stamp duty. It is common practice for solictors to ask for this up front, when you consider how many purchases they must be dealing with, the interest gained can be quite a tidy sum.

I have a very good relationship with my solictor, I told her it would take me a couple of days to get the money together, she told me not to worry, so long as I gave it to her by X date (3 weeks later), then she would pay it on my behalf.

I would suggest, rather than risk a confrontation (or bad feeling), just say you need some time to gather the money, you understand it is not due til 30 days after completion and can you hand it over then.

dfarry

Yes indeed... I spoke to the Inland Revnue earlier and they said.... as long as they get the form/payment and it's all OK within 30 days they will issue the certificate that goes of to the Land Registry.

The certificate can be sent to me, however the transfer documents would also need to go to the Land Registry. That said the person I spoke to didn't feel it would be a problem for me to do all this.

She did say that normally solicitors/conveyancers would deal with all this but really it just wraps up the completion and doesn't specifically need a "legal" person.

On the accompanying letter from the solicitor it states.... that I must return the form to their office before completion and that they will send it directly to the Inland Revenue together with payment, also in bold it states "PLEASE NOTE THAT WE WILL NOT COMPLETE YOUR TRANSACTION UNTIL WE ARE IN RECEIPT OF YOUR SDLT FORM" (it doesn't mention the actual payment there though).... I think the point is... Why can they not complete?.... do they need to see that the necessary funds are available perhaps?

I will have a think about it over the weekend and speak to them on Monday, if there is good justification then fair enough....but if not then I will want to hold onto MY money until it due to the IR, I dont see the need for a middleman on this.

Hippychick

If you are purchasing with a mortgage, then solicitors are bound to abide by the Council of Mortgage lenders handbook which stipulates that you cannot complete a transaction unless the solicitor holds money on file to pay stamp duty and register the property. (Clause 10.3 of the CML Handbook https://www.cml.org.uk)

It is also a safeguard to ensure that the SDLT is sent off in time, if it is received late then you will be fined £100.00, however if your solicitor sends it off late then you can make them pay the fine.

I would hand it over to the solicitors, where i work we ensure that the SDLT is sent off on the day of completion to avoid facing late return penaltys. I doubt they would be that bothered about holding onto your money to gain interest from it.

dfarry

Thanks Hippychick, that seems resonable justification to me...

indeed my money is probably peanuts to them, but to me it is alot of cash and I would want to hold it for as long as I can.... as it is £9K+ in tax is a bitter pill to swallow

Woby_Tide

£30 in interest max or a £100 fine? For the sake of ease and passing on the liability for making sure it is paid in time i.e. preventing any risk that your own bank stuffs up, I'd give the solicitor the burden with a week or so to go. By then the interest lost is probably about £10