SRA: rebuke and £1,000 fine
A solicitor involved in conveyancing transactions that resulted in the non-payment of £2m in stamp duty land tax (SDLT) has accepted a rebuke from the Solicitors Regulation Authority (SRA).
Now defunct Leeds firm Dixon Law Solicitors acted in 47 transactions over two and a half years that used two SDLT avoidance schemes, and former director Kelly Buckle-Fleming was involved in the supervision or conduct of some of them.
She is the latest in a long string of solicitors to face disciplinary action because of their involvement in SDLT schemes.
One of the schemes here involved deeds of novation, under which purchaser clients became ‘substitute purchasers’ following the novation of agreements between the seller and a third party corporate entity.
The other featured option agreements, under which seller clients executed option agreements granting a third-party corporate entity an option to purchase the property between the fifth and 21st anniversaries of the sale at a pre-agreed price.
According to a regulatory settlement agreement published by the SRA on Friday, the firm identified, in advice letters to clients, the possibility of lenders making enquiries as to the existence of the tax scheme and the possibility that this may influence their willingness to lend.
However, in breach of her duties to them, Ms Buckle-Fleming did not tell her lender clients that the purchaser client was using an SDLT scheme, nor did she tell the lender clients how the transactions were structured.
“The result was that the lender clients were not given material information to enable them to reach an informed decision as to whether to proceed with the mortgage offer or renegotiate terms,” the SRA said.
Further, Ms Buckle-Fleming agreed that she acted where there was a conflict between the interests of the purchaser and lender clients.
In mitigation, the solicitor said that Dixon Law stopped handling conveyancing transactions involving SDLT avoidance schemes following the SRA’s warning notice in February 2012, and that she did not have sole conduct of the transactions.
In addition to accepting a rebuke, Ms Buckle-Fleming agreed to pay a £1,000 fine and £3,000 in costs.