Solicitor error on deeds.

MaggieAnne01

saajan_12 said:

What did you file for stamp duty at the time of the purchase? Limited companies are subject to the higher rate regardless of how many properties are owned.

Re what to do now, could you "gift" the property to the company for £0?
- Not 'correct' but it may have the desired effect in the quickest timeframe.
- Stamp duty is based on the price paid ie £0 for this transfer not the value so no impact
- There may be CGT if the property has appreciated and a small cost to get someone to do the transfer, which you could arguably claim from the solicitor. 

Hello saajan 12   Thank you for taking the time to reply.      As it was our first property in the business was not sure at first what stamp duty we paid,   checking it turned out to be not the higher rate.      The higher rate will need to be paid,  however the rate went up after the purchase a further 2% I believe.   Hopefully as it is the solicitors error I will be exempt from paying the extra 2% and any solicitors fees occurred. 

Gift the property sounds interesting,  will have to look this up.

Regards

Maggie

MaggieAnne01

Yorkie1 said:

OP, when you first instructed the solicitor, you'll have received a client care letter which confirmed that you were instructing the firm, and it would have included details of how to complain in it too. Alternatively, I would expect the firm's website to contain details of who to contact in the first instance.

Once they receive a formal complaint, their complaints policy should be sent to you (it may also be on the website), which I would expect to set out timescales for an initial response and full response, and how to escalate if you are still not satisfied.

Even though you are already in correspondence with them about it, it may help you to set things out from the start so it's all in one place. And be clear about what you want as an outcome. (And that you don't want to have to pay anything extra for the investigation and/or rectification work, beyond what you should have paid, e.g. tax, at the original time. You should not be out of pocket by reason of their incompetence / the passage of time).

Thank you Yorkie 1 for taking time to reply,   will take your advice about being clear and def do not want to be out of pocket for their incompetence. 

Regards

Maggie

MaggieAnne01

Thank you everyone,  very helpful advice.

I am out of country for the next two weeks so will not be able to read or reply until I return on 17th June.

Regards

Maggie

user1977

You may wish to seek advice from a separate solicitor to sort it out (at the expense of the first one).

saajan_12

MaggieAnne01 said:

saajan_12 said:

What did you file for stamp duty at the time of the purchase? Limited companies are subject to the higher rate regardless of how many properties are owned.

Re what to do now, could you "gift" the property to the company for £0?
- Not 'correct' but it may have the desired effect in the quickest timeframe.
- Stamp duty is based on the price paid ie £0 for this transfer not the value so no impact
- There may be CGT if the property has appreciated and a small cost to get someone to do the transfer, which you could arguably claim from the solicitor. 

Hello saajan 12   Thank you for taking the time to reply.      As it was our first property in the business was not sure at first what stamp duty we paid,   checking it turned out to be not the higher rate.      The higher rate will need to be paid,  however the rate went up after the purchase a further 2% I believe.   Hopefully as it is the solicitors error I will be exempt from paying the extra 2% and any solicitors fees occurred. 

Gift the property sounds interesting,  will have to look this up.

Regards

Maggie

A business doesn't get a 'first property' at the standard rate, its higher rate for all. Who (if anyone) advised you to pay the standard rate? As now there could be HMRC penalities and interest. 

Practical options as I see it are: 

1) Pay the correct higher rate SDLT in your name (as its your 2nd property) by correcting your tax return and then gift it to the company for £0 (amount of the stamp duty you pay). 

2) Push the solicitor to correct the buyers name on the purchase from last year, and then correct any SDLT filing -  may be a long wait if the seller has to agree when they no longer have any interest and if the SDLT you paid needs to be refunded plus company needs to pay.

user1977

Which party contracted to buy the property? If the error only crept in to the conveyance deed then I can see scope for that to be corrected (with the seller's involvement), but if the whole deal was in the individual's name then not sure that can be retrospectively changed. The remedy is surely for the OP to transfer title to the company and their solicitor to pick up all the resulting costs.

SDLT_Geek

saajan_12 said:

MaggieAnne01 said:

saajan_12 said:

What did you file for stamp duty at the time of the purchase? Limited companies are subject to the higher rate regardless of how many properties are owned.

Re what to do now, could you "gift" the property to the company for £0?
- Not 'correct' but it may have the desired effect in the quickest timeframe.
- Stamp duty is based on the price paid ie £0 for this transfer not the value so no impact
- There may be CGT if the property has appreciated and a small cost to get someone to do the transfer, which you could arguably claim from the solicitor. 

Hello saajan 12   Thank you for taking the time to reply.      As it was our first property in the business was not sure at first what stamp duty we paid,   checking it turned out to be not the higher rate.      The higher rate will need to be paid,  however the rate went up after the purchase a further 2% I believe.   Hopefully as it is the solicitors error I will be exempt from paying the extra 2% and any solicitors fees occurred. 

Gift the property sounds interesting,  will have to look this up.

Regards

Maggie

A business doesn't get a 'first property' at the standard rate, its higher rate for all. Who (if anyone) advised you to pay the standard rate? As now there could be HMRC penalities and interest. 

Practical options as I see it are: 

1) Pay the correct higher rate SDLT in your name (as its your 2nd property) by correcting your tax return and then gift it to the company for £0 (amount of the stamp duty you pay). 

2) Push the solicitor to correct the buyers name on the purchase from last year, and then correct any SDLT filing -  may be a long wait if the seller has to agree when they no longer have any interest and if the SDLT you paid needs to be refunded plus company needs to pay.

A problem with the strategy of accepting that the property belongs to the individual and then gifting it to the company, is that for the purposes of SDLT this is treated as a market value transaction.  See Finance Act 2003 section 53.  https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm30220