Solicitor made mistake with stamp duty

Filthy

I moved in to my new home at the end of October 2007. I paid £230k for it. Shortly after moving in, the solicitor that had acted for me on the purchase of the property sent me a cheque for the stamp duty (that I had previously paid to him along with his fees). With the cheque was a letter explaining that upon submitting the application to the Inland Revenue they had been told that the property is in an exempt area, and therefore no stamp duty is payable.

I was surprised, and called the solicitor to check this was really true, explaining that I didn't want the Inland Revenue to come after me for the money in the future because of a mistake. I was assured that the property was in an exempt area and therefore I had nothing to worry about.

Four months later (last week) I received a call from the solicitor telling me that they had made a mistake. Someone in their office had incorrectly identified the property as being exempt from stamp duty (the value of the property was above the threshold for exempt properties in the area). Contrary to what I had been told at the time, the application was never actually submitted to the Inland Revenue. They asked me to send a cheque for the stamp duty, and they would pay the penalty charged by the Inland Revenue (about £150).

I feel that as my solicitor has made the mistake, he should pay the stamp duty. As a result of his advice (that no stamp duty was payable), I took action I otherwise wouldn't have taken (spent it!). I have written to a partner in the firm and so far been offered just £150 compensation. I have told them this is not acceptable.

I would be interested to hear whether people agree with me that the solicitor should pay the stamp duty. Also, if I can't reach agreement with them, what avenues are open to me. Should I go to the law society?

Any thoughts welcome.

ginger

It depends on what basis they submitted the stamp duty transaction form. It should have been on your behalf - but did you sign it or did they sign it as agent? Did you have an option? I would pusue the Solicitor for payment of outstanding stamp duty especially as you queried it. If you get no joy, report them to the Office for Supervision of Solicitors.

Doozergirl

Do you genuinely think it's fair that someone else pays your bill?

They've admitted they were wrong, they will pay the fine, they are paying you a bit of compensation too, but it's you that owes HMRC money, not them It sounds pretty fair to me. Push it later if you want to, but HMRC don't take kindly to being owed.

PasturesNew

I'd still pay it, I'd ask for time though.
£230k = £2,300 stamp duty.

I'd have not trusted/believed them at the time and put the money aside for a few years "just in case".

Maybe you can offer the solicitors £200/month for a year, see if they bite. But really it's your bill and it's due.

ginger

But you pay your Solicitor to advise you and if the advice is wrong then it is their problem not yours. Have you checked to see if you were in fact in an exempt area?

Filthy

It is an exempt area, but only for properties up to £150k.

Filthy

As far as I was concerned they were going to pay the stamp duty - I certainly never asked them not to. It was them who told me that the property was actually exempt, and sent me my money back.

chappers

ginger wrote: »

But you pay your Solicitor to advise you and if the advice is wrong then it is their problem not yours. Have you checked to see if you were in fact in an exempt area?

Thats the thing it's just advice and if their incorrect advice puts you out of pocket then sue their !!!!!!. But their advice didn't put you out of pocket save for the fine from HMRC(which thay said they will pay)as they returned the money you set aside for SD.
Youi don't have any way out of this it is your responsibility.I wouldn't try playing legal funny games with a firm of lawyers, as I know who my money would be on to win.

dekh

IMHO, I would say pay and pursue afterwards, the solicitors would have to pay the penalties to date because it was their fault but if it is not paid now HMRC will keep adding the penalties (every 30 days?) and the solicitor will refuse to pay the additional fines.

brightonman123

solicitor should take the hit- if you paid for their services, there is an expectation that they know what they are doing..

extra- if the sols get uppy, suggest refer to law society (( hope you have something in writing, to back up the claim that is was exempt..?)

movingforward2010

its still a bit unfair to land someone with a bill for over £2k out the blue, due to a mistake made by a firm professionals who ensured the OP that they didnt have to pay..

just my 2 cents worth....