Angela Rayner made headlines after it was revealed that she had not paid the correct amount of Stamp Duty Land Tax (SDLT) on the purchase of a flat in Hove. She has since resigned as deputy prime minister and housing minister as a result of the scandal.
From a financial planning perspective, the affair highlights the complexity of UK property taxes, as well as the danger of making mistakes. Even if the penalties may not as be severe as those faced by Rayner, errors with your own tax affairs could still be costly.
Crucially, the situation highlights the importance of seeking specialist tax advice with complex financial arrangements, such as a property purchase involving the use of trusts.
Read on to find out more.
Angela Rayner underpaid Stamp Duty by £40,000
In May 2025, Angela Rayner purchased a flat in Hove for around £800,000.
As is usual, the conveyancing solicitor working for her completed the documentation associated with the purchase on her behalf.
This included an SDLT submission based on the standard rate, assuming the flat in Brighton would be her only property, which meant a total of £30,000 was paid.
However, it has subsequently transpired that Rayner should have paid a higher rate of SDLT, and a bill totalling £70,000. This is down to a decision made by HMRC that the flat should be treated as an additional property.
As a result, she underpaid SDLT by £40,000.
Rayner put her primary property in trust for her children
Angela Rayner previously jointly owned a property in Ashton-under-Lyne with her ex-husband, who she divorced in 2023.
At the start of 2025, she transferred her interest in the property into a trust for the benefit of her disabled son.
This was a perfectly legitimate transaction, and is an understandable measure to take to protect the future financial and residential security of her son.
Putting any asset in a trust effectively means you no longer have control over it. Instead, the responsibility passes to your nominated trustees, who are then legally obliged to comply with the specific terms of the trust.
Because you no longer own the assets in trust, this legal arrangement is often used as an effective mitigation strategy against Inheritance Tax (IHT).
However, HMRC has ruled that, for SDLT purposes, Angela Rayner still had a sufficient interest in the property and therefore remained a beneficial owner.
HMRC will always consider trust arrangements carefully when determining whether a purchase counts as an “additional” property.
Unfortunately, the conveyancing solicitor who acted for Angela Rayner on the purchase of her Hove flat was not a tax specialist. Because of this, they did not recognise the issue, and advised that, as the new flat would be seen as her main residence, a lower rate of SDLT would be payable.
The conveyancing firm has subsequently confirmed that they advised Rayner to seek specific tax advice.
Government ministers are required to uphold the highest possible standards
Rayner referred herself to the independent adviser reporting to the prime minister on ministerial interests, for investigation.
The independent adviser decided that, while she had acted in good faith, ministers are required to uphold the “highest possible standards” and, in this instance, those standards had not been met.
Ultimately, she was forced to resign because of her oversight and failure to take the appropriate specialist tax advice, rather than any deliberate attempt to avoid tax.
There are 2 important lessons you can learn from this case
While the details relating to the underpayment of SDLT by Angela Rayner are very specific, the story does raise two important issues you should be aware of.
1. Property purchases can be a more complicated tax issue than you may realise
In many cases, the amount of SDLT chargeable on a property you are buying is straightforward to calculate.
This is because most transactions are either made by a first-time buyer, or involve the sale of one property and purchase of another. This means the new home will become your primary property for SDLT purposes.
However, certain issues or circumstances can muddy the waters, and make the amount of SDLT chargeable less clear. These may include:
- Properties that are in a trust
- The ownership of several properties, such as a buy-to-let portfolio
- Changing the designation of a main residence.
Because of this, if your purchase arrangements are more complex, it is always sensible to seek specialist tax advice.
You should be aware that HMRC will almost certainly pursue any underpayment of SDLT. As well as reclaiming the underpaid amount, they may also impose financial penalties. The severity of these penalties will often depend on whether any errors are deemed to be simply carelessness, or a deliberate attempt to mislead.
2. Complex tax issues require advice from specialists
Tax affairs can be particularly complex. This is especially true in instances like those described above, where trusts are involved.
Certain situations can also involve layers of legislation, precedent, and interacting rules.
This case highlights the key difference between generic financial guidance of the kind provided by the conveyancing solicitor, and more detailed advice from a specialist in the relevant field.
The case you read about here was a particularly high-profile example. Yet, it still demonstrates that mistakes of the kind Angela Rayner made, and the penalties for non-compliance, are preventable if you have the right advice.
Get in touch
If you have any queries about your own financial and taxation arrangements, please get in touch.
You can email enquiries@dbl-am.com or call 01625 529 499 to speak to us today.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
The Financial Conduct Authority does not regulate tax planning or trusts.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
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