The types of SDLT avoidance schemes that were heavily marketed following the introduction of SDLT in 2003 until around 2015 have received plenty of HMRC attention and there have been many changes over the years to the SDLT legislation to combat unintended SDLT savings opportunities. HMRC are now routinely investigating users of stamp duty mitigation schemes and some types of scheme have been defeated.
This has emboldened HMRC into claiming a double SDLT charge on some types of scheme so that the taxpayer is at risk of paying double the SDLT charge that they were seeking to avoid in the first place. Some of these types of SDLT mitigation schemes were based on forged legal opinions.
Patrick Cannon is advising clients who were sold aggressive SDLT savings schemes by unscrupulous tax scheme providers or their solicitors without being given a proper risk warning that such schemes might be attacked by HMRC in the years to come and receive judicial and press scrutiny. Patrick is helping clients to settle their SDLT avoidance schemes with HMRC, avoid the double charges to SDLT that HMRC are seeking in some cases and acting for them on claims for damages for negligent tax advice or worse against the advisers and introducers involved.
It is said by many such advisers that compensation is not available because the client would otherwise have paid the SDLT and has therefore suffered no loss. But this is not true. In cases where HMRC are seeking double charges on different steps in the scheme implementation, clients are at risk of suffering a double charge. In addition, clients will have typically incurred scheme fees of up to 50% (plus VAT) of the SDLT saving that was promised by the promoter plus additional costs of implementation over and above the usual conveyancing charges. These amounts are in principle recoverable.
In some cases, counsels’ opinions were forged to suggest that counsel endorsed the scheme and/or the scheme provider fraudulently claimed that the scheme had HMRC “approval”. Victims of these schemes are facing huge tax bills as a result of the failure of the SDLT planning and in some cases face the loss of their business and/or their homes to settle their tax bill. Many are desperate and are on medication.