SDLT Mitigation schemes.......buy cheap, buy twice!

SDLT Mitigation schemes.......buy cheap, buy twice!

Author
Discussion

The Moose

22,821 posts

208 months

Friday 22nd August 2014
quotequote all
What did HMRC say was due?

dave_s13

Original Poster:

13,813 posts

268 months

Friday 22nd August 2014
quotequote all
Stamp duty, again.

The Moose

22,821 posts

208 months

Friday 22nd August 2014
quotequote all
dave_s13 said:
Stamp duty, again.
frown Did they issue a fine as well?

dave_s13

Original Poster:

13,813 posts

268 months

Friday 22nd August 2014
quotequote all
The Moose said:
dave_s13 said:
Stamp duty, again.
frown Did they issue a fine as well?
Hmrc have indicated that late payment penalties may be lifted but interest on the balance won't be.

I'm trying to claim an amount from the SRA to cover the unpaid stamp duty + interest... Should find out next week.

Sara123bear

4 posts

114 months

Friday 19th September 2014
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Hi Dave
I have been following your posts as I am also in the same position, have been waiting for my final letter from the HMRC telling me how much I owe, I now have this and have contacted the SRA with a hope of them helping with compensation, but as you probably know they are not willing to help and have told me to try and make a claim from Abode/Arc conveyancing's Professional Indemnity insurers, was wondering if you had spoken to them and what their position on it was, also do you have their name/phone number. Thanks for that I am all new to this, would be grateful for your reply.

dave_s13

Original Poster:

13,813 posts

268 months

Friday 19th September 2014
quotequote all
Hi.

I have literally just posted off a letter of claim and a portfolio of evidence to the insurers solicitors.

I'm on my phone so hard to write in great detail. If you Pm me I'm happy to tell you what I know so far (not much). I'll update this thread later as well but it won't be for a day or two. Busy tonight and tomorrow.

Oh and if I'm successful (I have a feeling I won't be!) then I'm happy to forward my letter of claim to anyone that wants it.

Edited by dave_s13 on Friday 19th September 17:06

Sara123bear

4 posts

114 months

Tuesday 23rd September 2014
quotequote all
Hi
Thanks for your reply
I have sent you PM not sure if you have got it, this is my 1st time on here!

dave_s13

Original Poster:

13,813 posts

268 months

Wednesday 22nd October 2014
quotequote all
blues for uk said:
http://www.elsstampduty.co.uk/arc-solicitors.html

does anyone have an opinion on the above?

our position is we bought our house in 2010, paid over the full amount of stamp duty to arc, but today we got a HMRC request for 10k unpaid stamp duty saying that arc never paid over our money.

ive contacted stephensons (useless), ive got a SRA complaint to do (which i read here is also useless), ive looked around this site and other forums for ideas, but it all seems to the outcome is pay hmrc plus interest.

it seems we have been duped by arc and have to pay the stamp duty all over again. since solicitors cant be relied upon to pass on our money to hmrc, it would have been better to have paid hmrc directly back in 2010.

dave - you mention you have done a claim to arcs insurers - how did you get on?

please provide details of arcs insurers?

Edited by blues for uk on Wednesday 22 October 15:56


Edited by blues for uk on Wednesday 22 October 15:57
Hi,

10k!! eek by christ that's a bitter pill to swallow. Given the amounts involved in your case I may be inclined to get some professional help maybe? In your case if you did not enter into any mitigation scheme but just paid SDLT in the usual way then the SRA may be successful for you as they have misappropriated your funds.

You are correct though. You have no choice but to pay back HMRC. Once the principal amount is cleared they will then back date the interest and add on latre payment charges and send a separate bill. HMRC have indicated to me in writing that the late payment fee may be waived, not the interest though. If you contact HMRC and get your SDLT payment code you can log in and pay it off piecemeal, that's what I'm doings at just 1-200 per month. I was told (unofficially) that if they can see the debt is being paid off then they will generally leave you alone.

At the moment I'm at the stage of having submitted my letter of claim to the PI insurer, they have acknowledged receipt and I should get a response within 12 weeks or before 13th Jan in my case.

The SRA responded to my claim thus (paraphrased):-

SRA said:
There is not enough evidence that the firm were aware of the illegality of the scheme they were offering to its clients for us to justify a grant. When the firm told you that the scheme was legal and presented a low risk, they may have, at the time believed that that was the case, this would therefore fall under poor advice and/or professional negligence on their part for failing to research the scheme before offering it to you. The Compensation Fund cannot authorise a grant in relation to bad advice and/or negligence, however you may be able to refer your claim to the firms professional indemnity insurers. The details are XL Insurance Company Plc of 70 Gracechurch Street, London, EC3V 0XL. The policy number quoted is IL12ACM1 and the claims contact is Mr Matthew Chesney, he can be contacted via email at matthew.chesney@xlgroup.com or telephone on 0207 933 7000.
Although the insurer is detailed as XL insurance as per the SRA response I've ended up dealing with the following

Laura Mellstrom - (senior associate)
Paul Hilton - (Paralegal)

If you have a look at their website you should be able to find contact emails for them (not sure I should post them publicly?? - there is a process to go throiugh to get that info, according to the SRA).
http://www.kennedys-law.com/people/

Like I said before, IF I manage to successfully claim for my losses then I'd be happy to share my letter of claim with whoever wants it. The basis of my claim is that Arc Property solicitors should not operate without knowledge of the law, passing that responsibility onto a lay punter is essentially negligent.

Kennedys also pointed me in the direction of this guidance
http://www.justice.gov.uk/courts/procedure-rules/c...

You can skip the first bit (B1) as the firm no longer exists. I just drafted and sent a letter of claim + evidence to the insurers firm.

Good luck!

Edited by dave_s13 on Wednesday 22 October 20:22

dave_s13

Original Poster:

13,813 posts

268 months

Wednesday 22nd October 2014
quotequote all
Sara123bear said:
Hi
Thanks for your reply
I have sent you PM not sure if you have got it, this is my 1st time on here!
Sorry, I' didn't see any PMs???

If you still need some more info or have anything to add yourself please post on here, I can PM you if needed.

Andehh

7,107 posts

205 months

Wednesday 22nd October 2014
quotequote all
Feel sick for you guys, can't believe Raj Ali got away with this all. I remember having the same conversation with them and their "sure fire mitigation scheme" going as far as saying they were their to advise me legally, and couldn't advise me of anything remotely illegal/dodgy so "trust us". frown

Sara123bear

4 posts

114 months

Wednesday 22nd October 2014
quotequote all
Hi Dave
I have done all of the above that you have just explained, sent a letter off to the Insurers, basis of my claim is that Arc were negligent, especially in my case as in my advice pack that they sent when entering us into scheme they claimed that they had an insurance protection scheme that they would provide us with at no extra cost subject to underwriting which if the scheme failed (as it has!) then all money would be refunded. Well there dosent seem to be an insurance policy as nothing else was ever sent to us, so I am thinking pretty negligent on that count. I have also complained to the Legal Ombudsman and sent them all my details and they are looking into it, who knows if that will get me anywhere but is worth a try
There must quite a few of us going through this but can't seem to find much online.

Sara123bear

4 posts

114 months

Wednesday 22nd October 2014
quotequote all
blues for uk said:
http://www.elsstampduty.co.uk/arc-solicitors.html

does anyone have an opinion on the above?

our position is we bought our house in 2010, paid over the full amount of stamp duty to arc, but today we got a HMRC request for 10k unpaid stamp duty saying that arc never paid over our money.

ive contacted stephensons (useless), ive got a SRA complaint to do (which i read here is also useless), ive looked around this site and other forums for ideas, but it all seems to the outcome is pay hmrc plus interest.

it seems we have been duped by arc and have to pay the stamp duty all over again. since solicitors cant be relied upon to pass on our money to hmrc, it would have been better to have paid hmrc directly back in 2010.

dave - you mention you have done a claim to arcs insurers - how did you get on?

please provide details of arcs insurers?

Edited by blues for uk on Wednesday 22 October 15:56


Edited by blues for uk on Wednesday 22 October 15:57
With regard to ELS do they charge? Anyone know?
With regard to the SRA I would have thought that they would be able to help you if you hadn't knowingly entered into the mitigation scheme as is hardly your fault, which is what they told me they wouldn't help as I had signed the forms (under Arcs legal advice!)

Edited by Sara123bear on Wednesday 22 October 22:00

dave_s13

Original Poster:

13,813 posts

268 months

Wednesday 29th October 2014
quotequote all
Interesting, thanks.

partride1

3 posts

112 months

Tuesday 25th November 2014
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Hi Dave and everyone else. I have been reading your posts for a while now as we were also customers of Abode, received a letter from HMRC in December 2013 so have been nervously watching the post for a year. About 4 weeks ago we received a demand from HMRC for £10320 stamp duty as Abode hadn't paid it. When we used Abode and requested a quote they responded to us straight away selling their SDLT scheme which I questioned, was assured we would get our money back if an enquiry was raised, was a legal loop hole etc etc. From what I can gather now, we weren't entered into a scheme but Abode submitted our SDLT tax return for us and put the purchase price of our property as £103,000 which was false and we didn't know about this.

I am after some advice on how to handle this please and if possible Andehh or Dave, would you mind forwarding me a copy of that letter you have mentioned? I have emails where I have queried it and they said it is a legal loophole but nothing as good as that.

I raised a claim with SRA compensation fund when I first received the HMRC assessment and got a letter back 2 days later saying we weren't eligible as we agreed to be entered into a scheme. I then wrote back to them saying we agreed but tax planners didn't consult us as promised and that we weren't entered into a scheme in the end but a false purchase price was used by Abode.The SRA has asked me to send them my file within 7 days so they can look at it again.

Should I be doing anything else? Have you all written to HMRC as well? I spoke with them on the phone and have taken out a loan to pay them their money but haven't asked for interest or anything to be waived.
As I have mentioned any help would be really, really appreciated. Many thanks Emma

ShortShift811

532 posts

141 months

Tuesday 25th November 2014
quotequote all
blues for uk said:
Emma

Abode's professional indemnity insurers (Dave has posted the contact details). On the latter we have been told Abode was inadequately insured.
Out of interest, who told you Abode were inadequately insured and did they give any details on how / why?

I work in a related area so might be able to help. Feel free to PM me if you'd prefer.

dave_s13

Original Poster:

13,813 posts

268 months

Tuesday 25th November 2014
quotequote all
ShortShift811 said:
blues for uk said:
Emma

Abode's professional indemnity insurers (Dave has posted the contact details). On the latter we have been told Abode was inadequately insured.
Out of interest, who told you Abode were inadequately insured and did they give any details on how / why?

I work in a related area so might be able to help. Feel free to PM me if you'd prefer.
Hi... If you know anything that might help please post it up. Anything that may benefit should be made public knowledge really.

I wonder if her off the weakest link would be interested?

ShortShift811

532 posts

141 months

Tuesday 25th November 2014
quotequote all
Hi Dave

I replied to your OP on Page 1, giving some information on professional indemnity insurance for Solicitors. Genuinely sorry to hear how you, other PHers and many other people have been affected by this situation.

I'm a specialist insurance broker, dealing solely with Professional Indemnity Insurance (PII) for Solicitors, so have some insight and a professional interest in how this pans out (no connection to Abode or with anyone affected though).

Basically, Solicitors in England and Wales have the widest type of PII cover available to any profession, in order to protect clients of solicitors in exactly this type of scenario. Professional Indemnity is designed to pay the financial loss of a third party arising from the solicitors' negligence, error or omission, The policy wording and cover for all solicitors is laid down by the Solicitors' Regulation Authority. The insurer providing Abode with cover cannot refuse to come off cover and must deal with the claim in the first instance, even if Abode no longer exists or cannot pay their premium. The last insurer of a firm also has to provide run off cover to the same level for a minimum of 6 years, even if they don't receive payment. Even if Abode's insurer has gone bust, you would normally have recompense through the Financial Services Compensation Scheme.

So, the reason for my question was because I can't really see how someone could describe Abode as 'inadequately insured' - Solicitors have to prove sufficient PII cover is in place to obtain their practising certificates and stay in business each year.

Typing on my phone, so can't provide the links to the law society website which has lots of info on PII for solicitors, but I'll try and do so tomorrow.

Equally happy to field any queries about PII and how people are getting on with making a claim from Abode's insurer, but obviously I can only give general comment and not specific advice, not being their broker or insurer.

Here's hoping everyone gets a satisfactory resolution.


dave_s13

Original Poster:

13,813 posts

268 months

Tuesday 25th November 2014
quotequote all
Thanks for that.

I'm at the stage now where I've submitted a letter of claim to the insurer on the grounds of professional negligence.

They have acknowledged this and have stated I will have a decision but the end of December. Watch this space.

ShortShift811

532 posts

141 months

Wednesday 26th November 2014
quotequote all
Thanks for clarifying.

I would normally take 'inadequately insured' to mean that a Solicitor didn't have the right level or type of cover, which doesn't appear to be the case.

XL are an extremely large American insurer with a good credit and security rating. They have operated in Solicitors' PII for the last 5 years or so. No broker would give an absolute guarantee as to the worthiness of an insurer, but XL are about as safe / worthy as you can get.

'XL have reserved their position' is insurer speak for they are investigating and taking advice as to whether or not the policy should respond and pay any of the claims.

I'm not privy to any info beyond what I have read here and in the press, but the key question from a professional indemnity perspective seems to be "did clients of Abode knowingly try to mitigate / avoid SDLT, or were they unwitting and Abode negligent, or even fraudulent, in their advice?"

It's a complex and important question from all points of view. XL will not want to accept one claim and see the floodgates open for all others. Abode's limit of cover, at least £3M, will operate on an 'each and every claim' basis, meaning that if it is decided all claims are to be treated separately, XL could be on for an unlimited number of claims each costing up to £3M - a huge consideration for XL.

I can't see how a Solicitors' PII policy would pay any SDLT that has up to now been avoided, although it may pay any additional fines & costs incurred due to the incorrect actions of the solicitor, per the above.

The usual course of these things is for the legal position to be tested in court and any claims to follow the precedent set. At best it appears there were some sharp practices at Abode, but it could be a lengthy process before any form of recompense is decided.

ETA - good to see Kennedy's are handling things. As far as I know they're a reputable, experienced firm in such matters.


Edited by ShortShift811 on Wednesday 26th November 09:57

dave_s13

Original Poster:

13,813 posts

268 months

Wednesday 26th November 2014
quotequote all
ShortShift811 said:
...
ETA - good to see Kennedy's are handling things. As far as I know they're a reputable, experienced firm in such matters.


Edited by ShortShift811 on Wednesday 26th November 09:57
Your input is appreciated given your experience, thank you.

With regard to Kennedy's. All they offered me was the option of them writing to HMRC on my behalf asking them to waive the outstanding SDLT given the circumstances. There was no guarantee this would work and it would cost me £500 to try.

Even I know that HMRC wouldn't entertain waiving the outstanding amount so what Kennedy's are doing trying to flog a dead horse at my expense is questionable at best.