As the settlement stage approaches, the compliance caseworker
will need to put forward their views on the tax effect of the
amendments to the purchaser’s land transaction return.
If an enquiry also covers other land transaction returns the
tax liability for these returns will need to be agreed as well. The
figures of tax lost will need to be agreed before the offences
which have been committed over the full period of the enquiry can
be considered.
When figures are suggested to the purchaser or agent care
should be taken to ensure that they are put forward on a without
prejudice basis. Where necessary, the letter should make clear that
it is not a closure notice.
It is at this stage that a compliance caseworker will need to
be particularly vigilant to ensure that nothing that they do could
be interpreted as completing the enquiry.
Closure notices have to be issued to the purchaser, so if the
negotiations are with the purchaser’s agent there is little
chance of the correspondence being interpreted as completing the
enquiry. Extra care is needed if corresponding directly with the
purchaser.
If the purchaser or agent does seek to argue that letters in
which the settlement proposals were put forward have effectively
completed the enquiry a disclaimer should immediately be issued and
advice sought from the compliance manager.
The purchaser should already have been made aware of the
Board’s practice on penalty abatements (see
SDLTM86530) and of accepting pecuniary
settlements where there has been a loss of tax and liability to
interest and/or penalties has been incurred.
If an agreement on a pecuniary settlement cannot be reached,
an amendment to the self- assessment may be made instead, and
subject to the right of appeal, steps can be taken to determine the
appropriate tax, interest and penalties.
A submission must be made to the compliance manager before
this course of action is followed.
