Stamp Duty Land Tax

George Osborne gave property buyers an early Christmas present in December 2014 when he announced far reaching changes to the Stamp Duty Land Tax system.

All property purchasers must pay Stamp Duty Land Tax (SDLT) when they purchase land or property in England, Wales and Northern Ireland over a certain value. The current threshold for residential property is £125,000, i.e. if the price of the property you buy is less than £125,000 there is no SDLT to pay.  Once your property purchase has completed and you have received the keys, your solicitor is obliged to file an SDLT return and pay any SDLT due within 30 days.

Before this change, SDLT was charged at one rate on the entire value of the property and there was a big jump in the tax payable when you crossed a threshold. For example if you purchased a property at £249,000 you would be taxed £2,490 (1% of the price) but if you bought at £251,000 you would be taxed £7,530 (3% of the price). In practice this meant properties which had a true value just in excess of a price threshold struggled to reach a fair price as prices were gathered just below each threshold.

The ‘new’ rates apply to completions from 4th December 2014 onwards and each new tax rate is payable on the proportion of the property value which falls within that band. The new rates are:

  • up to £125,000 of the purchase price remains zero rated;
  • the portion from £125,001 to £250,000 is taxed at 2%;
  • the portion from £250,001 – £925,000 is taxed at 5%;
  • the portion from £925,001 to £1.5 million is taxed at 10%; and
  • the portion above £1.5 million is taxed at 12%

As an example, you would pay £3,750 of tax on a £275,000 house purchase instead of £8,250 under the old regime.

The Law Society estimated that SDLT would be cut for 98% of property purchasers.

If you have any queries about SDLT or legal matters generally, please do contact us.


There is no longer a mechanism in law to remove directors and partners from a business on the grounds of mental capacity

There is no longer a mechanism in law to remove directors and partners from a business on the grounds of mental incapacity

It is no longer possible to remove directors and partners of a business on the grounds of mental incapacity.  The Mental Health (Discrimination) Act 2013 stipulates that directors and partners who have lost capacity must be supported in their role rather than removed from it.  This relatively new law cannot be circumvented by contrary provisions in the Articles of Association or Partnership Agreement.   But how can business people be supported and who has responsibility to prepare for the worst?

1.   The management technique to be used is “Business Lasting Powers of Attorney”

Business Lasting Powers of Attorney (“BLPAs”) appoint “attorneys” to act on director’s/partner’s behalf in the situation where they are unable to do so for themselves owing to mental incapacity.  They are now paramount to the smooth running of a business, should the worst happen.

2.  What happens in default?

In the absence of a BLPA, no-one has the right to take decisions for the incapacitated director/partner until a “deputy” is appointed by the courts.

The deputy steps into the shoes of the director/partner much like an attorney would, but it is still preferable to appoint attorneys.

It costs much more and takes many months to appoint a deputy and may leave the business effectively frozen and exposed to risks and unnecessary costs or losses. How can a business function with a director who must be involved with key decisions but who cannot make those decisions? Furthermore, directors/partners can discuss and choose appropriately qualified and experienced attorneys but, if no-one appropriate comes forward to be a deputy, the courts appoint a third party professional of their choice.

3.  Directors/partners are personally responsible and liable

Each director/partner needs to put their own BLPA in place before they lose capacity but all directors/partners are responsible for ensuring the smooth running of the business. All directors/partners are personally liable to review their business documents and ensure that BLPAs have been put in place by all of their co-directors/ co-partners as a management tool to support each other.

Directors/partners are free to appoint whomever they choose to be their attorney; although they must choose someone with relevant expertise and experience to avoid being criticised and personally liable. Family members may not be an appropriate appointment and conflicts of interest must be carefully considered. The other directors/partners have a duty to object if someone inappropriate is chosen so it is sensible to have an open discussion about who is to be appointed.

In the absence of a BLPA and should the worst happen, the co-directors/co-partners must ensure that someone appropriate (themselves in default) is pursuing a deputyship.

If you would like assistance to discuss BLPAs and ensure that you and your colleagues have mechanisms and procedures in place to avoid any criticism and liability, please do contact Catchpole Law.