A solicitor has claimed he was ‘comforted’ he was not breaking tax avoidance disclosure rules by a visit from Solicitors Regulation Authority officials.
Charles Williams, from Gwent firm FWDLaw Limited, carried out 95 conveyancing transactions in which he acted for both the purchaser and lender, but failed to inform the lender that the buyers had used a stamp duty land tax avoidance scheme.
In a notice posted by the SRA today, Williams admitted acting contrary to three rules of the code of conduct and breaking three SRA principles.
But in his mitigation, Williams said he had carried out the transactions in good faith and had been reassured by a visit from the SRA that he was not doing anything improper.
The notice said: ‘Mr Williams states that he was comforted in his view because of an SRA Practice Standards Unit visit in February 2010 where scheme cases were provided to the SRA’s officers to review.’
The solicitor said none of the allegations subsequently raised in a forensic investigation report into him had been raised as a concern by the unit officers.
He also insisted that neither mortgage terms nor Council of Mortgage Lenders requirements seemed to necessitate disclosure.
Williams said he ceased his involved in SDLT schemes before SRA inspectors arrived in March 2012. He has since retired from private practice and the firm closed in December 2013.
The SRA said Williams had an obligation to disclose to his lender clients all information material to the clients’ matter.
‘In failing to disclose material information Mr Williams failed to act in the best interests of his lender clients,’ said the regulator. ‘Acting in transactions where there was a conflict or a significant risk of conflict between the interest of two or more clients.’
In total, Williams’ firm acted in 103 conveyancing transactions between 2008 and 2011 where clients had been party to a scheme to avoid paying the stamp duty. This initially resulted in the non-payment of almost £2m to HM Revenue & Customs.
HMRC had issued a technical newsletters in August 2007 and June 2010, which demonstrated that HMRC did not consider the schemes to be legitimate tax avoidance schemes.
Williams was fined £2,000 and rebuked for the breaches admitted. He also agreed to pay a £5,000 contribution towards SRA costs.