Tax Advice for Solicitors
In the same way that we would not provide any legal advice to our clients, the majority of solicitors shy away from giving tax advice. Unfortunately this can leave a marked gap in the service you provide as tax is often a key element of the work you are engaged on.
A large proportion of our work is done in partnership with solicitors. We are often engaged to provide the specialist tax advice required as part of a wider project being handled by the legal practice.
We work in conjunction with a large number of legal practices to help their clients maximise on the tax opportunities that are prevalent in real estate. If a taxable event is occurring such as an acquisition or disposal, there can also be a defensive element to providing the correct advice i.e. if the relevant tax legislation is not addressed taxpayers can find themselves losing out or even subject to punitive measures by HMRC.
Whilst providing best advice is the primary objective of our work, another important aspect is to protect your legal practice. Solicitors, especially those providing conveyance services, owe a duty of care to provide effective advice on all aspects of a transaction they are instructed on. This extends to many areas of tax, regardless of what your care letter says.
Some of the more common areas on which we are asked for advice include:
(Mouse over the points below for more information)
When a property changes hands a transfer value should be fixed for allowances on fixtures. This is different to simply listing the chattels in a property and is often overlooked or handled incorrectly.
Up to April 2012 actions could be taken post event to rectify any short coming that occurred in the conveyance, therefore taxpayers could act to mitigate their loss. However post Finance Act 2012 this is no longer possible. Allowances must be addressed and dealt with effectively during a conveyance or both parties (seller & buyer) stand to lose out. There can be a substantial amount of tax relief at stake in even the smallest transaction which can result in significant financial implication for your clients.
We have prepared a brief on these changes which can be downloaded by clicking on the link below.
We envisage that non-advice in this area will be a major source of negligence claims against conveyancers in the future. Give us a call today to protect both your clients’ and practice’s interest.
Section 198 elections
A s198 election is the normal mechanism for transferring capital allowances on fixtures during a conveyance. We see a lot of s198 elections, the vast majority are written so badly as to be legally void and subject to challenge by HMRC and tax savvy parties on the other side of the transaction. We know it happens because we are regularly engaged to advise these parties.
This can open your clients up to potentially substantial and unexpected loss. Getting this document wrong is not going to win you any friends!
Whilst the headline rates for stamp duty land tax ‘SDLT’ have been increasing at an alarming pace there has also been an ever expanding array of reliefs available in certain transactions, for different types of purchasers e.g. MDR, developers reliefs etc. Not identifying a situation where one of these is applicable can make a huge difference to the rate at which SDLT is due.
Here at STAX we can review your current transactions to see if any reliefs can be applied. In some situations these relief can even be applied post completion.
The Annual Taxation of Enveloped Dwellings ‘ATED’ is a new tax on properties held by non-natural persons. This is a completely new tax with its own reporting, reliefs and compliance requirements. Needless to say, making sure your clients are aware of and comply with the legislation in this area is crucial.
As well as providing advice direct to your clients we can also supply you with a number of resources, including:
- Draft emails to bring these tax related matters to you clients attention
- Articles for news letters
- Model documents e.g. s198 elections
- Technical briefs for use within your practice
- Training for you and your staff so they can identify areas of risk & opportunity
If you would like to find out more about the work we do and how we can assist your practice please don’t hesitate to contact us today.