A Harrogate solicitor has been banned from being a solicitor after he avoided paying stamp duty land tax (SDLT).
The action has been taken on Richard Chan, aged 46, following a Solicitors Disciplinary Tribunal.
- Declaring to the HMRC he had paid just £165,000 for a £525,000 house in Hampsthwaite
- Declaring to the HMRC he had paid £100,000 for a £763,750 office in Harrogate
On both occasions the declared price meant he saved around £50,000 in stamp duty land tax payments.
Mr Chan did not appear in-person at the tribunal and did not present any mitigation to his actions.
From 1 July 2005 until September 2010, Chan was a member of Arc Property Solicitors LLP. From 1 June 2010 until 16 May 2014 he was senior director of Abode Solicitors Limited. Abode traded as Arc Property Solicitors. On 4 October 2013, the SRA intervened into Abode.
The SRA closed down Abode Solicitors on 7 October, 2013.
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Chan told HMRC he had been advised at the time of the office purchase to insert an arbitrary figure as it was still unclear what the price was.
At the time of purchasing the office, Chan and his wife should have paid £30,500 in SDLT, given the property value of £763,750. On a tax return the respondent stated the price was £100,00. This was below the SDLT threshold at the time. HMRC imposed a penalty of more than £16,000 in full and final settlement.
The tribunal also found Chan had not told the SRA of the position with HMRC and that it had imposed a penalty on him. But it dismissed an allegation his firm had promoted SDLT avoidance schemes.
Chan paid a further penalty of £10,500 for tax avoidance in relation to the house purchase.The property was valued at £525,000 and SDLT of £21,000 was due. In a tax return a value of £165,00 was declared. This was below the SDLT threshold at the time.
After HMRC wrote to Chan in 2011, he had claimed to benefit from grandfathering rules which applied to certain tax avoidance schemes, but later withdrew this explanation. Tax officials said his failure to pay was deliberate in relation to the office and negligent in relation to the house.
The tribunal found dishonesty proven in relation to both purchases.
The tribunal also found Chan had not told the SRA of the position with HMRC and that it had imposed a penalty on him. But it dismissed an allegation his firm had promoted SDLT avoidance schemes.
