In light of the recent changes to the CQS Core Practice Management Standards (CPMS), it is imperative for CQS-affiliated firms to establish a comprehensive policy pertaining to Stamp Duty Land Tax, as stipulated in section 5.15. This adjustment underscores the importance of compliance with regulatory requirements.
CQS compliance consultants strongly advise firms to review and implement the necessary measures to align with the updated standards. Attention should be given to the formulation and implementation of a robust policy addressing Stamp Duty Land Tax
Firms updating their CQS Stamp Duty Land Tax Policy may wish to include the following elements:
(1) Develop a robust system for documenting and tracing the calculation process of SDLT.
(2) Establish clear procedures for maintaining a comprehensive audit trail that outlines the rationale behind SDLT advice provided to clients.
(3) Scrutinise the consideration amount specified in the sale contract and transfer deed as well as verifying that the amount is consistent between the two documents. Any discrepancies should be highlighted and ensure they are promptly addressed with relevant parties.
A recent Table of Content in a CQS Stamp Duty Land Tax Policy included:
SDLT Calculations
Pre-Exchange Due Diligence
Post-Completion Auditing
SDLT – Anti-Avoidance Measures
Noteworthy Situations
Post-Completion Stamp Duty Inquiries and Notifications
Anti-Avoidance Strategies
Matrix for Deferred Consideration Questions
Here are some sensible considerations when is comes to risks relating to Stamp Duty Land Tax:
Do not rely on an exclusion of tax advice in your letter of engagement or terms of business as a mechanism for avoiding SDLT claims.
Examine the SDLT questionnaire for your clients. Ensure it is written in clear and straightforward language, and verify whether it includes questions that clients are likely to comprehend and answer. Consider developing distinct questionnaires for residential and commercial property transactions to enhance the questionnaire’s relevance to the specific type of client and transaction.
Make certain that your questionnaire emphasises the importance of the posed questions and the potential consequences of providing inaccurate answers.
To ensure early identification of potentially complex SDLT cases, it is advisable to employ a flowchart, checklist, or case management tool. Some firm will adopt a specific SDLT question-set inside COMPLETIONmonitor. However, it is not recommended to rely on such a tool for the identification and calculation of the correct SDLT payable, as it is unlikely to capture all necessary complexities. Instead, it should be utilised as a means of isolating non-standard cases for expert review.
If your practice lacks an SDLT expert, establish a retainer agreement with an approved third-party expert to ensure timely access to expert guidance, thus minimizing the risk of complaints and claims for delays. Additionally, make sure to communicate any associated disbursements to clients in advance.