Stamp Duty Savings Scheme advice needed

julie11_2

My father is currently buying a property and our solicitors have offered to arrange for some Tax Planners to to carry out some work for us (apparently there is a legal loophole in the law) where HMRC do not receive the stamp duty payment, the tax planners do, with a fee to the solicitors for the referral and we get a large proportion of the tax value back 28 days after completion. Sounds too good to be true!

Has anyone heard of it and do you have any advice, what are the risks and how does it work?

Many thanks

Richard_Webster

They will want confidentiality agreements signed so nobody can tell you how the schemes work. I don't personally know. I've been approached by people who run these schemes and if I was interested I could get involved for clients but would have to sign a confidentiality agreement so couldn't share the way they do it.

Once the details of the method got out then those who devised it could not charge what they do for running the scheme!

julie11_2

I see, the conveyancers are receiving a hefty fee for the referral so very lucrative for them too. Is it a fairly new exercise? My friend is an estate who refers clients for conveyancing but was not aware of this service. I'm a little sceptical that it doesn't feel right but I suppose without anyone knowing how it works we will never really understand.

Many thanks Richard

The_White_Horse

if you do not know what the tax planners are doing, surely if you just pay them, you could be done for tax evasion? what assurances do they give?

mjdh1957

There's been a number of threads on these kind of schemes, so do a quick search.

I seem to recall that some people who were convinced by the scheme and went ahead ended up receiving demands from the tax people for the stamp duty at a later date.

The government employs people to ferret around and close loopholes as fast as schemers find new ones.

FTBFun

If you do a search in this forum, you'll see that these schemes generally don't work.

http://www.lawgazette.co.uk/news/solicitors-warned-stamp-duty-land-tax-avoidance-schemes

julie11_2

All I know is that apparently it's easier to accomplish with only one party buying, which in this case it is. Below is part of the information I have received in an email from the planners and I see there is a risk of losing out on some of the monies, although they make it sound unlikely.

Our panel of solicitors have been carrying out tax saving schemes for some years
and therefore are well versed in able to deal with your queries.

I can confirm that we will provide assistance to you in the unlikely
event that HM Revenue & Customs opens an enquiry during the 9 month window
after completion takes place.

Our fees for providing our services to you are set out above. You
irrevocably agree that these costs will be paid to our solicitor prior
to completion. They in turn will account to us on successful
implementation of the stamp duty scheme.

Once our solicitor has implemented the stamp duty saving scheme this
will enable them to register the transfer of the property. They will then
account to you for the saving after fees specified above.

In the unlikely event of the process being unsuccessful for any reason
within the 9 month enquiry window, then the full SDLT will become
payable.

In that event, we will refund our fees referred to above so that this
can be forwarded to HMRC. This is the extent of our liability to you as you
will appreciate there is no guarantee of success and that is a risk you
fully accept in entering into this arrangement with us.

To the extent that you become privy to any information surrounding the
process involved to achieve the tax saving you irrevocably agree to
keep such matters confidential.

FTBFun

http://www.wragge.com/alert_7235.asp

AnnaV

Don't do it and report your solicitors to the SRA. Sounds completely dodgy.

FTBFun

julie11 wrote: »

Our panel of solicitors have been carrying out tax saving schemes for some years and therefore are well versed in able to deal with your queries.

HMRC have cracked down on this recently so what happened in previous years is immaterial.

I can confirm that we will provide assistance to you in the unlikely event that HM Revenue & Customs opens an enquiry during the 9 month window after completion takes place.

Considering HMRC can open a "discovery assessment" up to 6 years afterwards this is a just a "cover our !!!!" paragraph. In fact it can be up to 21 years for "careless or deliberate mistakes!"

Our fees for providing our services to you are set out above. You irrevocably agree that these costs will be paid to our solicitor prior to completion. They in turn will account to us on successful implementation of the stamp duty scheme.

Successful implementation means what exactly?

In the unlikely event of the process being unsuccessful for any reason within the 9 month enquiry window, then the full SDLT will become payable.

No reference to the discovery window though.

In that event, we will refund our fees referred to above so that this can be forwarded to HMRC. This is the extent of our liability to you as you will appreciate there is no guarantee of success and that is a risk you fully accept in entering into this arrangement with us.

HMRC are unlikely to look into this in 9 months, mainly due to manpower issues (they take long enough as it is). So expect a discovery assessment in a year or two and to have to pay the full SDLT if your father goes through with this, plus interest.

To the extent that you become privy to any information surrounding the process involved to achieve the tax saving you irrevocably agree to keep such matters confidential.

Probably because anyone even remotely qualified wouldn't touch this with a bargepole. Its certainly something my firm doesn't do.

julie11_2

Thank you everyone, have decided that it is not worth doing and quite honestly I felt that it wasn't right anyway, but the way it is sold to you makes it sound like it's a perfectly legal benefit. Thank goodness for these forums; it's great to have support available from caring knowedgeable individuals. BIG THANKS.