Choosing the Right Solicitor to Purchase Your Property within a Personal Injury TrustApr 13th, 2018
Conveyancing solicitors are all the same, aren’t they? Wrong.
It may be reasonable to expect that 99% of all conveyancing transactions are relatively identical but for the normal complications that arise when buying or selling properties.
For recipients of personal injury compensation who choose to shelter their new home under the umbrella of a Personal Injury Trust, choosing the right solicitor may save thousands of pounds.Alternatively, choosing the wrong solicitor may cost many thousands of pounds without the client even realising they have been misadvised.
Lately, the majority of personal injury trusts are, quite appropriately, created as simple bare trusts.As such, they are transparent in relation to their tax treatment and benefit from the standard personal allowances that apply for taxes such as income tax and capital gains tax.
I am unaware of any reason why the same would not apply to Stamp Duty Land Tax (SDLT) applicable to a property purchase.However, it is my understanding that, for those conveyancing solicitors who use an online portal in respect of settling the SDLT liability, the simple question is asked whether the purchase is a personal or trust transaction.
Selecting the trust route automatically assumes that the taxation that would apply to, say, a discretionary trust, will apply leading to the loss of any First Time Buyer Relief.It is my belief that, in these instances, the box indicating that the purchase is a personal transaction should be selected to preserve such allowances.
The conveyancing solicitor in question went to the lengths of corresponding with HMRC requesting confirmation on whether the First Time Buyer Relief would be applicable for the client involved, but did not go to sufficient lengths to set out the type of trust in question.
In order to maximise our client’s position we have appealed to HMRC in the hope of recouping the additional SDLT of £5,000.