Thursday, 13 March 2014

Why the Lloyds Conveyancing Panel Needs to Worry About Stamp Duty Land Tax Incentives

The Lloyds Banking Group - via Halifax- are offering (on qualifying mortgage applications made between 4 March and 6 May 2014 inclusive) an incentive relative to first time buyers. The offer repeats one that ran for part of last year. The Halifax said that last year, this offer helped 14,000 borrowers.
According to Lloyds they will pay a sum equal to the Stamp Duty Land Tax where the purchase is in the 1% SDLT Band (over £125,000 - £250,000) and a £250 cashback where the purchase price is below the 1% threshold (0 - £125,000). There is no incentive being offered for purchase prices exceeding the 1% band.
Lloyds have stated that the SDLT incentive payment will be made via CHAPS to the lawyer within 7 -10 days of the completion date. The problem here is that if the solicitor is relying upon the incentive payment to pay the Stamp Duty then that could result in the Stamp Duty not being paid until 10 days after completion which would cause difficulties.
In the circumstances the best way to proceed is for the lawyer on the Lloyds conveyancing panel to insist on receiving the SDLT payment upfront from the client/purchaser (to enable the Stamp Duty to be paid immediately after settlement) and thereafter to refund it to the client/purchaser only once it has been remitted to the solicitor/conveyancer by Lloyds.
Please note that the primary obligation is to ensure prompt registration of the title and mortgage and anything else to the contrary is assuming a risk that you are better off not taking.

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