Reclaiming additional dwelling supplement paid during buying and selling of property (scotland)

Sweetpea2010

There was going to be a delay in my transactions when I bought and sold my main residence, so I had to pay additional dwelling supplement (ADS) as its known in Scotland. 10 weeks after the purchase and my payment of ADS I tried to claim back this money from Revenue Scotland, with great difficulty.  Turned out the Unique reference I was given identified that the solicitor had only paid standard property tax and not the ADS so I could not claim my money back. I have contacted the solicitors who have said it is just an error that they will resolve for me.  I am in shock to find if they dont pay it, with penalties then I am liable.  I have asked for a completion statement for both the buyung and selling of my properties on a number of occasions and not received this from the solicitors. I now realise if this had been forthcoming I would not be in this position today.  I am keen to know how other people would deal with this situation because I feel exhausted worrying about it and cant get this company to give me my completion statements

davidmcn

You'll need to tell us more about what happened during your purchase. Were the solicitors aware you were liable to pay the additional rate of LBTT? Did you see and approve the LBTT return? Did you give them sufficient funds to pay the ADS? Didn't you get a statement at the time of your purchase? 

If they had enough money for the ADS, and only submitted a return for the standard rate, then the solicitors would still have the additional funds. And if they made a mistake in the LBTT return then they'll be responsible for any costs you incur for penalties /interest - though I wouldn't expect Revenue Scotland to be particularly fast in coming after you. 

Sweetpea2010

Thank you for replying. Yes the solicitors instructed me to pay the ADS prior to my sale going through....i had to go to great lengths to prove (money laundering rules according to them) I had the cash to pay the ADS. Folowing the purchase of my new main residence, I was NOT given a completion statement. I was told I would be given a link to reclaim my extra money (ADS) when the sale of my second property            (which was currently my main residence) went through.  Following the sale of my second property, the solicitor was supposed to claim the ADS on my behalf, but it was all taking too long. I eventually asked for the reference and was sent it, when I tried to claim back the ADS I found out only standard stamp duty was paid.  The revenue called both myself and the solicitor's firm where a member of staff told them the client hadn't paid ADS at the time of the purchase. Revenue told me they would annotate my record with both sets of comments.  Despite repeated requests I have not had completion statements for either my purchase or sale. Although, I have been paid the appropriate money from my sale. I received a call from my solicitor who gave me reassurances this was simply a mistake and would be resolved in the new year as they are closed for holidays.  Ive been very concerned that they will give me no completion statements, especially in view of the current situation. I find the whole situation very strange. 

AdrianC

Presumably, you gave the sol the money to pay the full LBBT+4%ADS...?

davidmcn

If you didn't get a statement for your purchase, how did you know how much money to send to your solicitor? It's still not clear from what you've said whether your solicitors actually had the funds to pay the ADS or not.

And did you see a copy of the LBTT return or not?

It's taking months to get refunds from Revenue Scotland at the moment so your solicitors may have done you a favour!

Sweetpea2010

I was sent a copy of a budget planner  of what to pay by solicitor that included the additional ADS on top of standard, which is 4% in Scotland,  but i have never been sent a receipt of the amount of additional monies I paid..  The UTR reference i was eventually given, was just that, it did not give the amount, only the address.   I do have copy of my transfer from the bank,  that I had to show as proof I had paid and copy of the QA identifying the price of the house i bought.....emails showing I sold my other property.  The fact I've had no formal completion starement is minor,  my concern is, I have been told by revenue this is my responsibility and it should be paid with penalties now. How long do I leave the solicitor to sort this.  I really struggle to understand how its possible to make this mistake to be honest, surely the client ledger would not reconcile, this money has been floating around for quite a while.

davidmcn

If you paid the solicitor the full amount of the ADS and they haven't paid it to Revenue Scotland, then your solicitor still has the money. So they can return it to you - and they can do so now, rather than you having to wait for a refund from Revenue Scotland.

I don't know how bothered Revenue Scotland will be with seeking a penalty or any interest for the ADS which was never paid (and would now be due to be refunded anyway), but as I said, that's something your solicitor ought to be dealing with at their expense if and when there is any such demand.

Sweetpea2010

Okay. Thank you for your response, thats reassuring.

AdrianC

Sweetpea2010 said:

I was sent a copy of a budget planner  of what to pay by solicitor that included the additional ADS on top of standard, which is 4% in Scotland,  but i have never been sent a receipt of the amount of additional monies I paid..
...
I do have copy of my transfer from the bank,  that I had to show as proof I had paid and copy of the QA identifying the price of the house i bought.....emails showing I sold my other property.
...
I have been told by revenue this is my responsibility and it should be paid with penalties now.

So you DID send the sol the money, all of it, including the 4%?
And they failed to pay the tax man?

Yes, it's your responsibility. The sol is paying it on your behalf. But if you can show that you sent the money to the sol, and that it would have come back to you anyway, I can't see them being harsh. Not on you...

Sweetpea2010

Yes thats the situation ....i paid it to sol, and they didnt pay it to taxman.