HMRC Enquiries into SDLT Returns

(HMRC Compliance)

The process for HMRC (HM Revenue and Customs) to enquire into a Stamp Duty Land Tax (SDLT) return follows a structure akin to that of direct tax returns, as detailed in Finance Act 2003, Schedule 10, Part 3. The process:

1. Initiating the Enquiry:
   • HMRC initiates the enquiry by issuing a notice of enquiry to the purchaser.
   • This must be done before the end of the enquiry period.
2. Enquiry Period:
   • The enquiry period typically lasts nine months from specific dates depending on the filing status of the return:
     • On-time Filing: Nine months from the filing date, which is 14 days after the effective date of the transaction.
     • Late Filing: Nine months from the actual date of filing.
     • Amended Return: Nine months from the date of the amendment if the return is amended by the purchaser.
3. Completion of the Enquiry:
   • The enquiry concludes when HMRC issues a ‘closure notice’.
   • A closure notice can be issued if HMRC are satisfied that the enquiry is complete or if the Tax Tribunal directs HMRC to close the enquiry upon the purchaser’s application.
4. Amendments and Enquiry Scope:
   • If the enquiry notice is prompted by an amendment to the return and the normal enquiry period for the original return has expired (or if an enquiry into the original return has been completed), the enquiry is confined to issues related to or affected by the amendment (as per FA 2003, Schedule 10, paragraph 13(2)).
   • Beyond these time limits, HMRC can only address potential underpayment of tax through a ‘discovery assessment’.

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Example Scenario: Time Limits for Enquiry into Return

(HMRC Compliance>HMRC Enquiries into SDLT Returns)

➤ HMRC has set periods for launching enquiries, which when past, restrict them to only amended aspects, while closure notices formally end enquiries.

Background:

• Transaction Date: 1 March 2021
• Entities Involved: Hattie Ltd (purchaser) and Eric Ltd (seller)
• Payment Details: Hattie Ltd assumes debts of £2 million and issues shares worth £1 million to Eric Ltd.
• Property Valuation: The business includes a commercial property initially valued at £1.5 million.

Filing and Amendment Timeline:

• Original SDLT Return: Filed by Hattie Ltd on 12 March 2021, claiming acquisition relief under FA 2003, Schedule 7, paragraph 8, and paying SDLT at 0.5%.
• Amendment Notice: Hattie Ltd submits an amended return on 1 February 2022, reducing the property value to £1.2 million.
• HMRC Enquiry Notice: Issued on 15 February 2022.

Enquiry Period Analysis:

• The normal enquiry period for the original return expired on 15 December 2021 (nine months after the filing date of 12 March 2021).
• Since the enquiry notice was issued following the amendment and after the normal enquiry period had ended, the enquiry is restricted to matters related to the amendment.
• Specifically, the enquiry can address the revised valuation of the property but cannot question the availability of acquisition relief.

Key Points:

• Enquiry Timing: HMRC must act within specific periods to commence an enquiry.
• Scope Limitation: Enquiries related to amendments are restricted to the amendment itself and its direct implications.
• Closure Mechanism: The closure notice marks the formal end of an enquiry, either by HMRC’s satisfaction or Tribunal direction.

This process ensures that both HMRC and taxpayers have a clear framework and timeline for addressing any discrepancies or issues related to SDLT returns.

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HMRC Document and Information Requests

(HMRC Compliance>HMRC Enquiries into SDLT Returns)

➤ HMRC can request documents from purchasers and third parties with at least 30 days’ notice, subject to oversight, appeal rights, and penalties for non-compliance.

Overview

When conducting an enquiry, HMRC (HM Revenue and Customs) has the authority to demand documents and information from relevant parties. This process is subject to certain conditions and rights, as outlined below.

Notice Period

• HMRC must provide at least 30 days’ notice before requiring the submission of documents and information.

Appeal Rights

• The purchaser has the right to appeal against HMRC’s demand for documents and information.
• Detailed appeal procedures are available under a specific section dedicated to appeals.

Penalties for Non-Compliance

• If no appeal is lodged, or after an appeal is resolved, HMRC may impose penalties.
  • Initial Penalties: Applied for failure to produce the required documents.
  • Daily Penalties: Additional penalties may be applied on a daily basis until the documents are provided.

Scope of HMRC’s Powers

• HMRC can demand documents and information not only from the purchaser but also from third parties.
  • Third Parties Include:
    • Tax accountants
    • Other advisers

Oversight and Consent

• The exercise of HMRC’s powers to obtain information from third parties requires oversight.
  • Oversight Bodies:
    • Tax Tribunal
    • In some cases, a judge or sheriff

Specialist Advice

• Given the complexity of situations where HMRC exercises these powers, it is recommended that the relevant parties seek specialist advice.

Situations Beyond Scope

• Specific scenarios in which HMRC might invoke these powers are beyond the scope of this summary and require expert legal or tax advice.

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Amendments During an Enquiry by HMRC

(HMRC Compliance>HMRC Enquiries into SDLT Returns)

➤ HMRC can amend a return during an enquiry to prevent tax loss, with written notice and appeal rights for the taxpayer.

When an enquiry into a tax return is in progress, HM Revenue and Customs (HMRC) have the authority to amend the return if they determine that additional tax is due. This measure is taken to prevent the loss of tax revenue.

Conditions for Amendment

• Preventing Tax Loss: HMRC can amend the tax return to ensure no tax loss occurs.
• Written Notice: A written notice of the amendment must be given to the purchaser.
• Prima Facie Underpayment: This power is typically exercised when HMRC establishes an apparent underpayment of tax.
• Refusal to Pay: It is commonly used if the taxpayer refuses to make an appropriate payment on account, indicating a potential risk of default.

Appeal Process

• Right to Appeal: The purchaser has the right to appeal against the amendment to the Tax Tribunal.
• Application for Postponement: The purchaser can apply to postpone the collection of any additional tax.

Resolution of Postponement

• Agreement with HMRC: Postponement can be agreed upon between the taxpayer and HMRC.
• Tax Tribunal Determination: If an agreement cannot be reached, the Tax Tribunal will determine the question of postponement.

This process ensures that while HMRC secures the collection of due taxes, taxpayers are also provided with a fair opportunity to contest amendments and seek postponement where justified.

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Amending SDLT Returns

(HMRC Compliance>HMRC Enquiries into SDLT Returns)

➤ Purchasers have 12 months to amend SDLT returns for errors, with HMRC able to reject them, requiring major changes to be filed as new returns.

Voluntary Amendments

• Amendment Period: The purchaser has a 12-month period from the filing date to amend the return.
• Purpose of Amendments: Amendments are typically made to correct any errors that have come to light, which may influence the penalty position.
• HMRC’s Role: HMRC has the authority to reject amendments if they disagree with them.

Minor Amendments

• Correction Method: Many minor amendments can be addressed by writing to the Stamp Duty Land Tax Office. Refer to Appendix A for contact details.

Major Amendments

For significant changes, such as:

• Identity of Purchaser or Property: If the error alters who the purchaser is or what property is involved.
• Effective Date Change: If the ‘effective date’ needs to be adjusted and this change is after the date of notification.

Steps for Major Amendments

1. Submit a New SDLT Return:
   • File the new return online for efficiency and accuracy.
2. Notify HMRC:
   • Send a letter to the Stamp Duty Land Tax Office (see Appendix A).
   • Include the reasons for the new return.
   • Provide the unique tax reference numbers (UTRNs) of both the correct and incorrect returns.

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Referring Matters to the Tax Tribunal

(HMRC Compliance>HMRC Enquiries into SDLT Returns)

➤ HMRC and the purchaser can refer matters to the Tax Tribunal, which issues binding decisions and can close enquiries through a formal notice, with rights for the purchaser to appeal.

• Agreement for Referral:
  • HMRC and the purchaser have the option to agree to refer specific matters to the Tax Tribunal during an enquiry.
  • The First-tier Tribunal may pass the referral to the Upper Tribunal if deemed appropriate.
  • The decision made by the Tribunal is binding on all parties involved, subject to the usual rights of appeal through the courts.

Closure of Enquiries by HMRC

• Notice of Closure:
  • Enquiries are typically concluded when HMRC issues a notice of closure.
  • The notice of closure is issued once HMRC is satisfied that no further amendments to the return are necessary.
  • It must clearly state whether any taxpayer amendments to the return are accepted.
• Appealing a Closure Notice:
  • The purchaser has the right to appeal to the Tax Tribunal against a closure notice issued by HMRC.
• Requesting a Direction to Close an Enquiry:
  • If the purchaser believes that the enquiry should be closed, they can apply to the Tax Tribunal for a direction to close the enquiry.
  • This is an alternative to waiting for HMRC to issue a notice of closure.

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Failure to Deliver a Return

(HMRC Compliance>HMRC Enquiries into SDLT Returns)

➤ If a purchaser fails to deliver a return, HMRC can issue a notice requiring it within 30 days and may impose penalties through the Tax Tribunal for non-compliance.

Notice Requirement by HMRC

• If a purchaser fails to deliver a return, or if HMRC believes that a return should have been delivered, HMRC may issue a notice requiring delivery of a return.
• A minimum of 30 days’ notice must be given.
• The notice must specify the transaction in question.

Non-Compliance with Notice

• If the recipient fails to comply with the notice, HMRC may apply to the Tax Tribunal for the imposition of a daily penalty.
• There is no provision for appeal against the notice itself. Grounds for potential appeal might include:
  • The transaction has not taken place.
  • The transaction is not notifiable.
  • The recipient is not the purchaser.

Additional Penalties and Determinations

• Penalties for failing to deliver a return are in addition to those automatically applied for late submission.
• If no return is forthcoming, HMRC may determine the SDLT believed to be unpaid, treating this as a self-assessment for enforcement purposes, including interest and penalties.

Time Limits for Determinations

• A determination cannot be made more than four years after the effective date of the transaction.
• If the taxpayer delivers a return within 12 months after the determination notice or within four years after the original due date for the return (whichever is later), the self-assessment replaces the determination.
• This self-assessment allows HMRC to launch an enquiry into the return.

Appeals to the Tax Tribunal

• The taxpayer may appeal to the Tax Tribunal against the assessment on grounds that:
  • The transaction has not taken place or been substantially performed.
  • The transaction is not notifiable.
• If the appeal is successful, it logically should displace any daily penalty for failure to comply with the notice, although the legislation does not explicitly state this.

Provision for Destroyed or Damaged Documents

• HMRC may treat a return or any document as not having been delivered if it is destroyed or becomes illegible while in their care.
• There are no known cases where HMRC has relied on this provision.

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Discovery Assessment

(HMRC Compliance>HMRC Enquiries into SDLT Returns)

➤ HMRC can use a Discovery Assessment to recover unpaid tax found after the usual enquiry period or if no return was filed, especially in cases of fraud or unforeseen errors.

A Discovery Assessment is a mechanism employed by HM Revenue and Customs (HMRC) to address potential tax underpayments. This assessment becomes relevant when tax irregularities are discovered outside the standard enquiry period or when no tax return has been filed. Understanding the conditions and processes associated with discovery assessments is crucial for taxpayers to ensure compliance and avoid unexpected tax liabilities.

Enquiry Period and Initial Investigations

• Return Submission and Enquiry Period:
  • When a tax return is submitted (or deemed submitted by a determination), HMRC typically investigates any potential tax loss within the enquiry period.
  • If HMRC suspects additional tax is due during this period, they will launch an enquiry.
• Actions During an Enquiry:
  • During an ongoing enquiry, if HMRC believes there is a risk of losing additional tax, they can amend the return. This allows HMRC to take immediate action to collect the tax owed.
• Conclusion of Enquiry:
  • Once the enquiry period ends, or an enquiry is completed, HMRC loses the automatic right to reopen cases or seek additional tax unless specific conditions are met.

Conditions for Discovery Assessment

• No Return Filed:
  • If no return has been made, HMRC can assess and recover any discovered underpaid tax.
• Post-Enquiry Period:
  • When the enquiry period has passed, or an enquiry has concluded, a discovery assessment can be initiated under certain circumstances.
• Fraud or Negligence:
  • Discovery assessments can be made to recover tax lost due to fraud or negligence by the taxpayer, their agent, or partner.
• Lack of Awareness by HMRC:
  • A discovery assessment can also be made if HMRC, based on the information available at the end of the normal enquiry period, could not reasonably have been expected to be aware of the tax loss.

Information Considered Available

• Sources of Information:
  • Information is considered available to HMRC if it is:
    • Contained in a land transaction return.
    • Furnished during an enquiry.
    • Reasonably inferred from the provided information.
    • Notified to HMRC by the taxpayer or their representative.

Conclusion

By recognising the conditions under which HMRC can reassess tax liabilities, individuals and businesses can better navigate the complexities of tax compliance.

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Reliance on Additional Information

(HMRC Compliance>HMRC Enquiries into SDLT Returns)

➤ When submitting additional information to HMRC, ensure it is complete and referenced correctly to avoid unnecessary enquiries or future disputes.

When taxpayers and their agents submit further information to HMRC at the time of submission of the Land Transaction Return (LTR), there are specific guidelines to follow:

• Submission Process: HMRC guidance advises that any additional information should not be enclosed with paper returns. Instead, it should be sent directly to the Stamp Office, referencing the Unique Transaction Reference Number (UTRN) of the relevant return(s).

Decision-Making for Submitting Further Information

Submitting additional information to HMRC is a decision that requires careful consideration:

• Risk of Enquiry: Providing further information can increase the likelihood of the transaction being selected for an enquiry. This is particularly relevant if the treatment of the transaction on the return is questionable.
  • Clear Treatment: If the treatment of the transaction is clear and correct, an enquiry will generally be fruitless. However, it will still incur administrative costs.
  • Uncertain Treatment: If there is doubt about the treatment of the transaction, it is crucial to ensure the submitted information is comprehensive. Incomplete information can lead HMRC to believe that a discovery assessment is justified if additional information comes to light later.

Implications of Submitting Further Information

The consequences of submitting further information include:

• Administrative Costs: Even if an enquiry does not reveal any issues, the process can still result in administrative expenses.
• Comprehensive Submission: Ensuring that HMRC has a full understanding of the transaction’s facts and circumstances is vital. This comprehensive approach helps in preventing future disputes or discovery assessments based on incomplete information.

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HMRC Discovery Assessment Time Limits

(HMRC Compliance>HMRC Enquiries into SDLT Returns)

➤ HMRC has up to 4 years to make a discovery assessment, extended to 6 years for carelessness and 20 years for deliberate actions or failure to file returns, with special rules for deceased purchasers and excessive SDLT repayments.

The general time limit for HMRC to make a discovery assessment varies based on specific circumstances. Here are the key points:

Standard Time Limit

• Four Years from the Effective Date: Typically, HMRC has four years from the effective date of the transaction to make a discovery assessment.

Extended Time Limits

• Six Years for Carelessness: If the loss of tax is due to carelessness by the purchaser or a related person, the time limit is extended to six years.
• Twenty Years for Deliberate Actions: The period extends to twenty years in cases where:
  • The loss of tax is brought about deliberately by the purchaser or a related person.
  • The loss of tax is due to a person failing to deliver a Land Transaction Return (LTR).
  • The loss of tax is attributable to a failure to notify under the Disclosure of Tax Avoidance Schemes (DOTAS) legislation.

Special Circumstances

• Death of the Purchaser: If the purchaser has died, the time limit is shortened to four years from the date of death or six years from the effective date of the transaction, whichever is earlier.
• Excessive Repayment of SDLT: If the assessment is to recover an excessive repayment of Stamp Duty Land Tax (SDLT), it can be made at any time during an enquiry into the relevant return or up to 12 months after the repayment is made, even if this is beyond the normal time limit.

Appeal and Postponement

• Right to Appeal: The purchaser has the right to appeal against a discovery assessment.
• Postponement of Additional Tax: The purchaser can apply to postpone payment of any additional tax.
  • This postponement can be agreed upon by HMRC.
  • If there is a disagreement, the matter can be determined by the Tax Tribunal.

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Addressing Mistakes in Tax Returns

(HMRC Compliance>HMRC Enquiries into SDLT Returns)

➤ Correct tax return mistakes within one year by amending the return; if missed, seek relief within four years of the transaction’s date.

Discovery of Mistakes Within the Amendment Period

• When a mistake is found within the allowed period for amendments, typically up to one year after the normal submission deadline, it should be corrected by amending the return.
• This process is detailed in the guidelines, which explain the steps to amend the return correctly.

Missed Amendment Deadline

• If the deadline for amendments is missed, taxpayers may still seek relief from excessive assessment due to a mistake in the return.
• For claims made on or after 1 April 2011, they must be submitted within four years of the transaction’s effective date.
• There is no provision to extend this period even if the return was submitted after the normal deadline.

Historical Claim Period

• Before 1 April 2011, claims could be made up to six years after the transaction’s effective date, allowing for the correction of most errors.
• The amendments introduced on 1 April 2011 significantly restrict the acceptable grounds for making a claim. For instance:
  • Errors in making or failing to make a claim or election cannot be corrected under these provisions.
  • Claims will be refused if the taxpayer knew or should have known the grounds for the claim before the normal period for making the claim expired.

Additional Claim Provisions

• If the claim involves a partnership, all partners must nominate a partner from the time of the relevant transaction to make the claim. This prevents a dissident partner from altering the treatment of an old transaction.
• Making a claim under these provisions can remove restrictions on HMRC’s ability to make a discovery assessment, necessitating careful consideration before pursuing such a claim.

Claims for Double Assessment

• A claim for relief can also be made if a person believes they have been assessed more than once for the same transaction.
• There appears to be no time limit for making such claims.

References and Further Details

• For more detailed information, refer to SDLTM54000 to SDLTM54120.

These guidelines provide a structured approach to addressing mistakes in tax returns, highlighting the importance of timely action and the specific conditions under which claims for relief can be made.

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Penalties, Fines, and Other Sanctions

(HMRC Compliance>HMRC Enquiries into SDLT Returns)

➤ HMRC imposes various penalties for late, incorrect, or incomplete SDLT returns, including fixed fines and daily penalties, which increase with continued non-compliance.

Penalties

As previously noted, HMRC views the interest charged for late payment of Stamp Duty Land Tax (SDLT) as compensation for the government’s loss of use of the money. Separate penalties are imposed for various failures. Although SDLT may fall under the new penalty regime outlined in FA 2009, Sch 55, as of May 2021, this had not been implemented for SDLT. Currently, the penalties are primarily found in FA 2003, Sch 10 and Sch 11, para 6. These penalties include both fixed and variable amounts, applied as follows:

• Late Submission of Return
  • Up to three months after the due date: £100
  • Three months or more after the due date: £200
  • If the return is submitted 12 months or more after the due date, an additional penalty up to the amount of tax chargeable on the transaction is imposed. This is in addition to the previous penalties.
• Failure to Submit Return After Formal Notice
  • A daily penalty of up to £60 for ongoing failure after HMRC has given a formal notice to deliver. This requires a direction from the Tax Tribunal and is additional to the penalties for late submission.
• Careless or Deliberate Delivery of Incorrect Return
  • A penalty up to the amount of understated tax. This penalty was integrated into the general FA 2007 regime for incorrect returns by SI 2009/571.
• Failure to Keep and Preserve Records
  • A penalty up to £3,000 for failing to maintain and preserve required records.
• Failure to Produce Documents or Information
  • An initial penalty of £300 for failing to produce documents or information after formal notice, with a continued daily penalty of £60. Additionally, at the discretion of the Upper Tribunal, a penalty based on the amount of SDLT payable can be imposed. However, these penalties are not applicable once the failure is rectified, serving more as an encouragement to comply rather than a punishment for non-compliance.

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HMRC Penalty Determinations and Appeals

(HMRC Compliance>HMRC Enquiries into SDLT Returns)

➤ HMRC issues penalties with appeal rights, using time limits of up to 20 years for deliberate non-compliance and up to six years for carelessness.

Formal Determination and Notice

• HMRC typically imposes penalties by making a formal determination.
• A notice of the determination is issued to the taxpayer.
• In some cases, HMRC may seek a determination from the Tax Tribunal.
• Taxpayers have the right to appeal the determination, initially to the Tax Tribunal and subsequently to the courts.

Fraud and Penalty Proceedings

• For cases involving fraud, penalty proceedings may be initiated in the High Court or the Court of Session in Scotland.

Time Limits for Penalty Determinations

General Time Limit

• The general time limit for determining a penalty or commencing penalty proceedings is four years from the date the penalty was incurred.

Extended Time Limits

• Careless Loss of Tax: The time limit extends to six years if the penalty relates to a case involving a loss of tax due to carelessness.
• Deliberate Tax Loss or Failure to Comply with Specific Obligations: The period extends to 20 years if the loss of tax is caused by:
  • Deliberate actions by the person.
  • Failure to deliver a Land Transaction Return (LTR).
  • Non-compliance with the Disclosure of Tax Avoidance Schemes (DOTAS) legislation.

Tax-Geared Penalties

• The time limit for determining tax-geared penalties is extended to three years after the tax determination.

Assistance in Preparing Incorrect Returns

• A penalty for assisting in the preparation of an incorrect return can be sought up to 20 years after the penalty was incurred.

These guidelines ensure that HMRC has adequate time to address various degrees of non-compliance, from careless errors to deliberate tax avoidance and fraud, while providing taxpayers with avenues for appeal and clarity on the timelines for potential penalties.

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Fines and Other Sanctions

(HMRC Compliance>HMRC Enquiries into SDLT Returns)

➤ Concealing, destroying, or falsifying documents can lead to fines, imprisonment, and criminal prosecution, with an outlined appeals process to challenge HMRC decisions.

Any person who engages in actions such as concealing, destroying, or falsifying documents, especially when those documents have been requested or required, is subject to significant penalties. Here are the key points:

• Criminal Liability: If convicted of concealing, destroying, or falsifying documents, an individual can face both a fine and imprisonment for up to two years.
• Court Orders: Failure to comply with a court order to produce documents or information can lead to being held in contempt of court, which can result in fines and/or imprisonment.
• Serious Cases of Fraud: In the most serious cases involving fraud, criminal prosecution is possible. Convictions in these cases may also lead to both fines and imprisonment.
• Scope: Handling such serious criminal matters typically falls outside the scope of general guidance and may require specialised legal assistance.

Appeals

Various references are made to the process of appealing against decisions made by HMRC (HM Revenue and Customs). Here’s an outline of the appeals process:

• Initial Appeals:
  • Appeals are first made to HMRC.
  • This can be done using the form provided with the notice of decision or by writing a letter.
  • The appeal must include details necessary for HMRC to identify the tax return or transaction and the decision being appealed.
• Appeal Timing:
  • Generally, an appeal must be made within 30 days of the decision or assessment.
• Independent Review:
  • If there is no agreement between the taxpayer and HMRC on the disputed matter, HMRC may offer an independent review by different HMRC officers.
  • The taxpayer has 30 days to decide whether to accept the review or refer the matter directly to the Tax Tribunal.
  • Acceptance of a review does not preclude a later appeal to the Tax Tribunal if the outcome is unsatisfactory.
• Tribunals:
  • SDLT (Stamp Duty Land Tax) matters are dealt with by the First-tier Tribunal (Tax) of the Tribunals Service.
  • Guidance on making an appeal to the Tax Tribunal and necessary forms are available on the Tribunals Service website or can be obtained by writing to the Tribunal Service.

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Record Keeping Requirements for Purchasers

(HMRC Compliance>HMRC Enquiries into SDLT Returns)

➤ Purchasers must keep transaction records for at least six years for tax compliance, with digital copies allowed but originals often preferred.

General Requirements

Purchasers are required to maintain and preserve necessary records to ensure the correct and complete delivery of returns. These records must include:

• Original contracts
• Transfer instruments
• Supporting maps and plans
• Other related documents
• Records of payments, receipts, and financial arrangements

Duration for Keeping Records

• Records must be kept for a minimum of six years from the ‘effective date’ of the transaction.
• Records should be retained until any HMRC enquiry into the return is completed.
• If HMRC’s right to enquire into the return extends beyond six years, records must be kept until this right expires.

Acceptable Formats for Records

• It is permissible to keep digital copies (e.g., scanned versions) of the documents instead of the physical originals.
• However, there may be concerns about the accuracy of digital copies compared to the original documents.
• As a precaution, many taxpayers might still keep the original documents in a storage facility even if they store information electronically.

Applicability of Record-Keeping Requirements

• The requirement to keep records applies whether a return is required or the transaction is exempt.
• This includes transactions covered under FA 2003, Sch 11.

Considerations for Different Types of Transactions

• Commercial Transactions: Keeping records for six years is typically reasonable and aligns with other standard record-keeping practices.
• Routine Home Purchases: The requirement to keep records for six years is less clearly justified since many homes may be resold within this period. Homeowners often unknowingly dispose of these records sooner, not realising the necessity to retain them for the full duration.

Summary

Ensuring proper record-keeping is essential for compliance with tax regulations. While digital copies are allowed, maintaining original documents is often preferred for accuracy and security. This requirement applies universally, although its practicality varies depending on the type of transaction.