LeO – SDLT spotlight

A slightly different tax story – LeO has recently released an article aimed at helping firms to deal with complaints from clients who were not able to complete their purchase before the change to SDLT rates coming into effect on 1 April 2025. All property firms should read it but some interesting comments from LeO are as follows:

‘The average (standard) residential property purchase currently takes between 12 and 16 weeks from offer to completion. However, there are many reasons transactions take longer. Therefore, it is likely that some purchasers will have instructed a firm on the basis they will not have to pay stamp duty and, due to delays in the transaction, will find themselves needing to pay SDLT.

Our previous experience of changes to SDLT arrangements is that it could lead to an increase in complaints to service providers and the Ombudsman. Whilst many purchasers will try to complete their transactions before the changes take effect, for some it will not be possible to complete in time. This may lead to complaints about how delays in conveyancing transactions have led to the payment of more SDLT than expected.

It is very important to note that when looking at complaints about delay that the Legal Ombudsman would not hold service providers responsible for delays that they did not cause.

It is also possible that there will be a corresponding increase in complaints about communication and advice. Complaints here may focus on what the complainant was told about the likelihood of completion before 1 April 2025, and how they were kept informed of any changes to the position.

The Legal Ombudsman expects service providers to provide reasonable updates to any key changes that will impact a transaction, as well as responding promptly to requests for information.’

The piece reminds firms that good complaints handing requires legal services providers to:

• ensure that complaints are addressed in line with complaints procedures, in particular in terms of providing timely responses;
• address all of the issues of complaint;
• consider the tone of their response, and whether it is conducive to an early and positive resolution; and
• consider the impact of any identified service failing on the client and, if appropriate, propose a remedy to recognise that impact.

The piece also contains some case studies. If nothing else, it gives firms an insight into how LeO will look at complaints about the SDLT deadline being missed. Source: www.legalombudsman.org.uk.