Overview
Compass supports solicitors in complex SDLT matters, particularly where ownership structures could trigger the Higher Rates for Additional Dwellings (HRAD).
A solicitor referred a client purchasing a property split between an individual and a trust. Conflicting advice had left the firm unsure whether HRAD applied to the transaction, creating potential compliance and reputational risk.
The Challenge
The key questions were:
- Would the trustees’ ownership of other properties trigger HRAD on the entire transaction?
- Did the beneficial ownership of the trust affect the SDLT liability?
If answered incorrectly, the firm faced professional indemnity exposure and potential client dissatisfaction.
Our Approach
Our team reviewed the trust deed and the ownership structure carefully. We confirmed that the trustees held legal title only, with no beneficial ownership. This meant HRAD did not apply.
We discussed our findings directly with the solicitor, providing clear, evidence-backed guidance to support a compliant return.
The Outcome
Compass confirmed that standard residential SDLT rates applied and HRAD did not affect the transaction. This ensured that the client’s liability was accurately calculated, avoiding any potential overpayment.
The solicitor could proceed confidently, having clear evidence to support the SDLT treatment, and the client’s trust in the firm was preserved.
By providing expert advice in a collaborative way, Compass helped mitigate risk and demonstrated due diligence without criticising the solicitor’s previous work.
Key Results
- Avoided PI exposure with expert verification
- Saved fee earner time by providing definitive guidance
- Preserved client confidence with a clear, compliant return
- Demonstrated the value of specialist input early in complex transactions
Conclusion
Trusts and mixed ownership structures can complicate SDLT. Compass ensures firms have the clarity and technical assurance to handle these transactions confidently, protecting clients and professional reputation.
