As a result of Angela Rayner’s recent resignation and fall from grace because of her significant underpayment of around £40,000 in stamp duty land tax (SDLT), I thought that today I would look into the details and complications of the case.
A cabinet minister having to resign isn’t the first time a high-ranking politician has been in the news and there is invariably a common theme in all of these type of scandals, if it isn’t about sex, then it’s about tax.
Angela Rayner demise has at its heart a significant underpayment of tax on her recently acquired luxury flat in Brighton. The Red Queen, as she’s unofficially known, has been found guilty of clearly breaking the ministerial code because she didn’t seek specialist tax advice on the matter.
If losing all of her official roles wasn’t bad enough, a new Viral rap video mocking her has in just 3 days already notched up over 100,000 views with lyrics including: “Bought me one house, bought me two; Flip another flat, taxman no clue”. The skit, titled ‘How Many Homes Can Rayner Buy?’, shows a computer-generated version of Ms Rayner dancing outside a row of flats, while wearing a fur coat over a tracksuit and flashing wads of cash.
The skit is a rather brutal parody and whilst my first reaction was this was a bit over the top, my second thought was that when you have a history of lecturing other people on their behaviour in public office, you really do need to be whiter than white in your own actions, which it is now clear, she wasn’t.
The meat of the matter
The major error that Rayner made concerns whether or not the 5% SDLT surcharge applied to the purchase of her Brighton flat. The surcharge kicks in when you buy a dwelling that is in addition to any other dwellings you may own anywhere on the planet. Most people own only one property, which is deemed as their main residence. For a lucky few, they may also own a holiday home here or abroad or perhaps a small portfolio of dwellings rented out to tenants.
I’m not going to make this Blog all about SDLT, but if you do want to know every nitty gritty aspect, go to: https://www.gov.uk/stamp-duty-land-tax/residential-property-rates Today I’m concentrating on the aspect of SDLT that Rayner tripped up over, namely the surcharge which is an additional 5% on top of the standard rates if you own another residential property.
The surcharge is waived if you’re replacing your main residence and buy your new home on the same day you sell your old one. However, in the scenario where a buyer buys their new home while their current home is still on the market, the surcharge applies initially: but when the former home is sold, the surcharge can be reclaimed from HMRC as long as it’s within a three-year window.
Family trusts and Inheritance Tax (IT)
IT planning can use a trust whereby assets are held by the trust on behalf of a beneficiary. It is not known what form of trust Rayner’s disabled son has, but I suspect it is a “life interest trust”, often used to hold medical compensation and to provide the beneficiary with a regular income or use of assets during their lifetime. Such a trust also protects the beneficiary’s entitlement to means-tested benefits because the compensation is no longer a personal asset. Trusts are also good, of course, for IHT avoidance purposes.
Rayner’s severely disabled son received compensation following a medical negligence case against the NHS and a court ordered the trust to be set up in 2020. As is often the case with negligence cases. Rayner and her ex-husband sold their shares of the family home to the trust in January 2025.
At first glance, she no longer “owned” any dwellings, the use of a ministerial flat in Admiralty House was on a grace-and-favour basis because of her position in government. The Brighton flat was bought in May 2025 and Rayner designated it as a second home for council tax purposes, which means paying double the usual council tax than someone who designates the property as their main residence. If the Brighton property is her second home, ergo the property where her son and other children live remains her main residence.
Under SDLT tax law, a child owning a dwelling via a trust is essentially ignored and the ownership of the property remains with the parents from an SDLT surcharge perspective. For all other intents and purposes, the parents no longer own the property.
Was it a genuine mistake?
From the view of a ‘man-in-the-street’, the trust has bought the property. Rayner no longer has ownership of the property, so if Rayner was asked by her conveyancers dealing with the Hove purchase: “Do you own any other properties?” the answer is clearly, “No, I do not own any other properties”. That statement is true, but because of the aforementioned SDLT rule about children and trusts, Rayner did still “own” the property under SDLT regulations.
Whether or not Rayner’s actions were based on a lie or an honest misunderstanding of trust law is the key issue. I doubt that any non-expert would know about the intricacies of SDLT or trust law, so most individuals would take advice from an expert in the field. Rayner’s conveyancing firm may well have asked probing questions, but we do not know for certain as a wall of ‘omerta’ has been erected by her solicitors.
It such a situation, anyone in the public eye should always document their questions and answers, as to whether or not a SDLT surcharge is applicable. We may never know if her solicitor asked the pertinent questions or whether or not Rayner answered truthfully. I will admit that many times I’ve asked a client about their income and have had to trust that they’ve answered truthfully, but I’m also acutely aware that subsequently I’ve found that some of them didn’t fully understand the question in the first place.
Professional advice is critical
Some breaking news has emerged from a posting on X (formerly Twitter) by Rayner’s conveyancing firm, which would indicate that they did ask the right questions. Leaving aside the question of a breach of client confidentiality by issuing their statement, I assume they felt the need to defend their reputation, holesssowever the clear implication from the post is that Ms Rayner has potentially lied.
I am not in a position to make an informed judgment on the issue, but even Rayner has now admitted that she had not taken expert legal advice and should have.
Accountant’s view
I honestly do not know whether the Red Queen’s fall from grace was due to dishonesty or by her making naïve assumptions as to her tax position, but either way anyone in a public position should make certain of their position before making a declaration that will benefit them financially, especially if it involves HMRC.
