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Stamp Duty

You have to pay Stamp Duty Land Tax (SDLT) if you buy a property in the UK over a certain price. This is charged on all purchases of houses, flats and other land and buildings.

Different rates apply in Scotland from 1 April 2015 when Land and Buildings Transaction Tax (LBTT) replaces SDLT.

The SDLT rate depends on:

the purchase price of the property
whether the property is residential

SDLT may also be due if you lease a property.

SDLT rates from 4 December 2014

SDLT is charged at different rates depending on the portion of the purchase price that falls into each rate band.

Before 4 December 2014, SDLT was charged as a single percentage of the property price.

Where contracts have been exchanged on or before 3 December 2014, and the transaction is completed on 4 December or later, you can choose whether you follow the new or the old rules.

Residential properties

Purchase price of property	Rate of SDLT (percentage of portion of purchase price)
£0 – £125,000	0%
£125,001 – £250,000	2%
£250,001 – £925,000	5%
£925,001 – £1.5 million	10%
Over £1.5 million	12%

Corporate bodies

SDLT is charged at 15% on residential dwellings costing more than £500,000 bought by bodies like:

companies
collective investment schemes

There are some exceptions. For example, you pay SDLT based on the new rates and bands where the property is used for:

a property rental business
a property development or resale trade
providing admission to visitors on a commercial basis

Residential leases

If your residential lease is for more than £125,000, you’ll pay 1% SDLTon the amount above the £125,000 threshold.

Conveyancing solicitors in London have reported that since the new rules were introduced there has been a fall in asking prices throughout London e.g. from 7% in Hammersmith and its environs to 0.5% in Hounslow.

Non-residential and mixed-use properties

Purchase price/lease premium or transfer value	Rate of SDLT (percentage of portion of purchase price)
Up to £150,000 – annual rent is less than £1,000	Zero
Up to £150,000 – annual rent is £1,000 or more	1%
Over £150,000 to £250,000	1%
Over £250,000 to £500,000	3%
Over £500,000	4%

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Delayed Diagnosis £120,000 High Court Award

Chloe McCarthy a 12-year old born with a dislocated hip was awarded £120,000 by the High Court recently for her future care due to a hospital blunder which led to a delay in her diagnosis and treatment.

Due to the error caused by an East London hospital she had endured restricted leg movement, great pain and undertaken several bouts of surgery.

From birth she had suffered from developmental dysplasia of the hip which was only diagnosed in August 2002 after several administrative mistakes and therefore three months late. As a result she was unable to undergo a manipulation of the joint to realign it with the socket, a procedure known as an immediate closed reduction.

Her medical experts attest that she could have avoided any operations and a suspected hip replacement by the age of 40 and in fact made a complete recovery just by wearing a cast for a few months.

She was represented by solicitors in London.

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Banks Fined – Litigation Tsunami Expected

A tidal wave of civil litigation is in expected after City watchdog the Financial Conduct Authority (FCA) fined five banks a total of £1.1bn for rigging the £3.4trn-a-day foreign exchange market (forex) on the 12th November.

The five – Citibank, HSBC, JP Morgan Chase, Royal Bank of Scotland and UBS – can all expect to be hit by claims from clients including pension funds, foreign property owners and other foreign exchange houses, according to solicitors in London who have been quietly lining up litigants for the last two years.

A vital component of any successful action will be proving that a bank behaved in such a way that it profited at the expense of its customers.

The FCA statement said: ‘It is completely unacceptable for firms to engage in attempts at manipulation for their own benefit and to the potential detriment of certain clients and other market participants. Our final notices include examples where each bank’s trading made a significant profit.’

The final notices also all contain references to collusion between traders at different banks using online messaging and chatrooms. The FCA cites one example of such chatroom manipulation which netted Citibank a profit of £62,581 and another in which HSBC banked £102,425.

The notices could prove a boon for those bringing cases because they also contain examples of traders congratulating themselves after successfully manipulating forex rates. This, from one UBS trader, is typical: ‘The best fix of my UBS career’ – after he used a chatroom to move rates to produce a profit for £328,100 for UBS.

Chancellor George Osborne has said a share of the fines will be taken by the Treasury and ’used for the wider public good’.

Tracey McDermott, the FCA’s director of enforcement and financial crime, said: ‘Firms could have been in no doubt, especially after Libor, that failing to take steps to tackle the consequences of a free for all culture on their trading floors was unacceptable. This is not about having armies of compliance staff ticking boxes. It is about firms understanding, and managing, the risks their conduct might pose to markets.

‘Where problems are identified we expect firms to deal with those quickly, decisively and effectively and to make sure they apply the lessons across their business. If they fail to do so they will continue to face significant regulatory and reputational costs.’

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London’s Hot £1bn Office Buying Frenzy

There’s a red hot property market prevailing in London at the moment according to commercial conveyancing solicitors with pressure on for completions before Christmas.

The Gherkin was speedily bought recently by Joseph Safra for £726 million according to industry insiders.

The strength of the capital’s economy and the reasonably high returns on investment are proving to be a sweet temptation for purchasers of London’s commercial buildings. Such transactions include the purchase of Bow Bells House near St Paul’s for £300 million by Fubon Life the insurance megalith from Taiwan; it also has recently added neighbouring One Carter Lane to its portfolio for £139 million.

Other hot purchases are Milton Gate, Vintners Place, Thames Court and Cannon Bridge House which are expected to achieve in excess of £800 million.

The Abu Dhabi-backed flats developer Northacre is the suspected purchaser of Victoria’s New Scotland Yard, home of the Metropolitan Police, for £300 million and a takeover bid for the Canary Wharf developer by Qatari and Canadian Investors has been tabled.

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Immigration Law changes on 6/11/14

On the 16th October 2014 the Home Office published its latest statement of changes to the Immigration Rules. This update outlines the key changes made.

Business visitors

A new category has been added for overseas lawyers who are employees of international law firms with offices in the United Kingdom. The change will allow the business visitor to provide direct advice to clients in the United Kingdom on litigation or international transactions, provided that they remain paid and employed overseas.

Tier 2

The Home Office will now make an assessment as to whether a genuine vacancy exists for Tier 2 (Intra-company transfer) and Tier 2 (General) applications. This change empowers entry clearance officers and in-country caseworkers to refuse applications where there are reasonable grounds to believe that the job described by the sponsor does not genuinely exist, has been exaggerated to meet the Tier 2 skills threshold, or – in respect of Tier 2 (General) – has been tailored to exclude resident workers from being recruited, or where there are reasonable grounds to believe that the applicant is not qualified to do the job. As the Sponsor Licence Unit already performs this function when assessing restricted certificate of sponsorship applications, it will be a duplication of effort if entry clearance officers also perform this genuine vacancy assessment. For those migrants earning in excess of £153,500, the resident labour market test requirements do not apply.

An existing requirement in the published guidance for sponsors is that Tier 2 migrants cannot be sponsored to fill a position, undertake an on going routine role or provide an on going routine service for a third party which is not the sponsor. This requirement is being replicated in the Immigration Rules. This enables applications by individuals for entry clearance or leave to remain and applications by sponsors for restricted certificates of sponsorship to be refused in line with any wider compliance action relating to the sponsor in question. This applies to so-called ‘contract cases’ where migrants are based at a client site and is of particular significance for the IT sector. These cases will now incur greater scrutiny to ensure there is a genuine provision of services by the sponsor and no disguised employment by the third party.

A change is being made to the Tier 2 (General) provisions for extension applications where the applicant is continuing to work in the same occupation for the same sponsor. Such applicants are exempt from the resident labour market test; at present, the exemption applies only if the applicant still has current leave as a Tier 2 (General) migrant when they make their extension application. The change will enable the applicant to benefit from the extension if his or her previous leave as a Tier 2 (General) migrant expires no more than 28 days before the extension application is made.

A temporary provision dating back to 2009, which waives the £20,500 minimum salary threshold where companies are reducing their employees’ hours to avoid redundancies, is being removed.

Tier 5 Youth Mobility Scheme

The annual allocations for participating countries on the scheme are being set for 2015. The allocations for New Zealand have been increased (16%).

Tier 2 (Sportsperson) and Tier 5 (Temporary worker – creative and sporting)

A change is being made to the table of governing bodies to include information on the tier(s) in which each body may endorse applicants. Updates are also being made to the list of sports governing bodies.

These changes came into effect on the 6th November 2014.

Original reporting by the International Law Office 14/11/14

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Wills and Contentious Probate: Have you made a Will?

Tanya Vasileva looked after her friend, Gertrude Stanley, in the years before her death at the age of 89.

Mrs Stanley, who had fled to London from the Nazis on the eve of the Second World War, believed she had no living relatives after her sister died in a concentration camp.

She promised her flat to Miss Vasileva in return for her years of care. After the widow’s death, in December 2009, she moved in.

But Mrs Stanley had not made a will, and a legal wrangle ensued after Peter Birchwood, a professional genealogist who has appeared on BBC series Heir Hunters, traced two distant cousins of Mrs Stanley.

Heir hunter: Peter Birchwood

Mr Birchwood, acting on behalf of Mrs Stanley’s estate, argued Miss Vasileva was a “trespasser” who should be ousted from the property and made to pay £50,000 for her years of rent-free occupation. But a judge ruled Mrs Stanley had promised the flat to her carer and said Miss Vasileva had “done her best” to look after the widow.

Judge Mark Raeside QC awarded Miss Vasileva £20,000 from the estate and dismissed Mr Birchwood’s financial claim against her. But he also estimated the value of the care provided by Miss Vasileva to be only £70,000, compared with the £160,000 value of the flat, and said she would have to leave by December so it could go back to the estate.

The High Court heard how Mrs Stanley fled Vienna and arrived in London in May 1939, when she was 19. She and her husband, Lawrence, lived together in their Belsize Park flat for 48 years, until his death in 1994. They did not have any children.

Despite her fortune, most of which was discovered in bank accounts and shares after her death, the widow lived a frugal existence and worried she would run out of money, the court heard. In 2002, the court heard, Mrs Stanley met Miss Vasileva at the supermarket where the younger woman worked. Miss Vasileva, who had moved to the UK from Bulgaria the year before, said they struck up a friendship after she delivered Mrs Stanley’s shopping.

After a stay in hospital in May 2005, Mrs Stanley phoned Miss Vasileva and asked if she could come to collect her. She did not want any professional carers and asked Miss Vasileva if she would help her stay in her own flat.

It was then that Mrs Stanley first said she wanted her friend to have her flat after she died — a promise she repeated many more times, the court heard.

Miss Vasileva looked after Mrs Stanley — including cooking, cleaning and helping her bathe — until she went into a care home in April 2009.

After the case Miss Vasileva said: “We weren’t just friends, we were more like grandmother and granddaughter, we were very close. She will always be in my heart.”

Original reporting by the London Evening Standard on the 8/7/14.

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Pre-Nuptial Agreements Increasing in the UK

A pre-nup is often a subject of much mirth in the UK; a dinner party debate about the merits of pragmatism versus idealism. Considering what you might do in the event of a divorce with regards to your estate is of course very pragmatic, but the partner calling for the agreement has often been depicted as a tad mercenary.

The demand for prenuptial practicalities is on the rise, with one London company reporting a 50% rise in people inquiring about pre-nups. Evidence from CAFCASS supports these claims, with a 2% increase in Private Law demand between 2013 and 2014. This followed a 9% increase on the 2012/13 figure.

This upsurge could have been partly prompted by the Law Commission’s suggestion that a pre-marriage agreement should form part of the marriage reform, and that pre-nups should be given the kind of legal weight which they’re afforded in Scotland.

The question was thrust into the news in 2010 when renowned German heiress Katrin Radmacher’s pre-nup was upheld by the Supreme Court. Radmacher’s partner, Nicolas Granatino, had been part of a pre-nup which agreed that no claim would be made on each other’s assets. After changing his mind on this agreement and asking for a sizeable chunk of his former wife’s estate, the court substantially reduced his claim in accordance with the pre-nup.

The rising prominence of the prenuptial agreement probably reflects the times we live in. Divorce is much more commonplace, and whereas marriage probably still carries as much weight in terms of devotion, people recognise that they can drift apart and this doesn’t tend to carry the same social stigma as it did in the past. Add to this the fact that family life can now be very complicated with marriages then remarriages, and the complicated family ties which emerge as a by-product of these separations.

Family solicitors in London have said “We strongly recommend that couples consider a pre-nuptial agreement – especially if property is involved. Also with social media being an increasing presence in most of our lives it may not be that surprising that couples are now not only taking steps to protect their estate in an event of a divorce but also their online reputation by including a social media clause in their pre-nup.”

There’s also the fact that the way we earn money as couples has changed dramatically. Modern couples are often equal partners in terms of income, so why should one person have claim over any assets that were acquired before marriage.

The question will always be a great topic of debate with its conflicting moral and practical dimensions. Many couples who neglected to sign a pre-nup will rue their lack of forward planning, but when everything is rosy, why spoil the party by introducing a potential bone of contention.

Perhaps the pre-nup is not that far removed from making a Will; divorce and death are both pretty grim prospects, but few people would question the practicality of making a Will.

Original reporting by PropertyWire 18/8/14

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Commercial Conveyancing Boom in London Surburbs

The company, around half of whose £1.2 billion portfolio is centred on London, owns a clutch of properties in locations which include New Malden, Acton, Bromley and Brentford.

But CLS, which has spent more than £40 million on suburban offices in the past two years, said a “significant increase in competition” from both foreign and domestic buyers as well as more readily available bank credit had pushed up prices in the outskirts of London.

The business’s chief financial officer John Whiteley said: “There are far fewer bargains about. We’ve bid on £90 million of property in the past six months and looked seriously at around three times that, but we’ve not bought any.

“We don’t want to overspend on any of them, we’ve been a bit greedy.”

Demand for space in cheaper areas of the capital has pushed rental values up almost 9% in the past six months.

Our service has become known as a reliable recommendation source for commercial businesses.

The UK’s biggest listed property company, Land Securities, continued its recent run of wheeler-dealing in shopping centres today as it sold its 50% stake in Bristol’s Cabot Circus to AXA Real Estate for £267.8 million. The company recently spent £656 million on a stake in Kent’s Bluewater shopping destination.

Original reporting by the London Evening Standard 13/8/14

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Benefit Fraud of £74,000 = 12 Months Jail

A benefits fraudster has been jailed after fleecing the taxpayer out of nearly £74,000 while running a £2.6million property empire.

Seema Bassi, 49, claimed she was a jobless single mother to pocket handouts for more than a decade.

But she was secretly amassing a property portfolio across Kent raking in a fortune from tenants, Snaresbrook Crown Court heard.

Bassi owned 26 homes worth a total of £2.6million, providing her with about £150,000 in rent a year.

She bought her first property in 1994 and started claiming benefits three years later.

Her portfolio included 14 flats and four houses in Gravesend, a house in Canterbury, three flats in Herne Bay, a two-bedroom terrace in Greenhithe, and a house in Richmond Street, Hartlepool, Cleveland.

Some of the properties were leased to Gravesham Council in Kent as sheltered housing for asylum seekers, the court heard.

Her fraud was uncovered after Gravesham Council started investigating her brother for failing to pay council tax in 2012.

The paper trail led investigators to contact Redbridge Council for more details about Bassi when they learned she had purchased 18 houses from her brother.

Stacks of documents were seized from Bassi’s home in Ilford, including bank statements and tenancy agreements.

For criminal defence solicitors in London please contact us.

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First Time Buyers Loans Hit 7-Year High

Mortgage lenders made 28,600 first-time buyer loans in June, 7% more than the previous month and the highest since November 2007, according to the Council of Mortgage Lenders. By value, banks and building societies lent £4.2 billion to those taking their first step on the ladder, the highest amount since August 2007.

Loans to other homebuyers also grew over the month but at a slower rate, increasing by 4% to 31,900 as the market cooled slightly in response to tighter mortgage restrictions introduced at the end of April, as well as higher anticipation of interest rate rises from the Bank of England.

CML director general Paul Smee said: “For the second month running since new rules took effect, lending characteristics remain similar to the market beforehand.

“We now feel confident that, as we would hope, the mortgage market review effect is more gentle dampener than hard brake.”

The CML’s figures showed affordability for first-time buyers little changed with buyers borrowing 3.47 times their income. They borrowed an average £123,865 in June, up from £121,500 in May. Record low interest rates meant payment burdens remained relatively low in June, at 19.3% of gross income. Over the second quarter as a whole, there were 79,900 first-time buyer loans — 24% up on the same period a year earlier.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “The lending market remains strong, suggesting that the impact of the mortgage market review has not been detrimental.”

To paraphrase Harold Macmillan, the former Prime Minister “Conveyancing solicitors in London have never had it so good!”

Original reporting by the London Evening Standard 11/8/14

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Author Archive Michael Morrison

Stamp Duty

Stamp Duty Land Tax rates

SDLT rates from 4 December 2014

Residential properties

Corporate bodies

Residential leases

Non-residential and mixed-use properties

Delayed Diagnosis £120,000 High Court Award

Banks Fined – Litigation Tsunami Expected

London’s Hot £1bn Office Buying Frenzy

Immigration Law changes on 6/11/14

Wills and Contentious Probate: Have you made a Will?

Pre-Nuptial Agreements Increasing in the UK

Commercial Conveyancing Boom in London Surburbs

Benefit Fraud of £74,000 = 12 Months Jail

First Time Buyers Loans Hit 7-Year High

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