The gaffes of Angela Rayner regarding stamp duty taxes are far from being resolved

In a recent turn of events, UK Labour Party Deputy Leader Angela Rayner has found herself embroiled in a tax dispute, stemming from the purchase of a property in Hove earlier this year.

According to HMRC's guidance, parents of under-18s are considered the owners of residential property, even if the property is held through trust and they are not the trustees. This principle, known as deeming provisions, has become relevant in Rayner's tax situation, creating a legal fiction to simplify complex issues.

The complexity of Rayner's domestic affairs arises from arrangements made to care for her son, who has lifelong disabilities and special educational needs. In 2023, Rayner and her then husband agreed that their children would remain in the family home while they routinely moved in and out to care for them. Some of their interest in the family home was transferred to her son's trust at this time.

At the time of purchasing the flat in Hove, Rayner was advised that she was only required to pay standard stamp duty, which would have totalled around £30,000. However, the deeming provisions likely involved the transfer of beneficial ownership or control of property interests under UK tax law, which triggered the obligation for Rayner to pay the additional Stamp Duty Surcharge. This has increased the tax owed from £30,000 to £70,000.

Rayner has acknowledged this error and sought fresh advice from "senior tax counsel" regarding her tax liability for the second-home stamp duty surcharge. She claims she was wrongly advised about her tax exposure when buying the property in Hove.

In January 2025, Rayner sold her remaining interest in the family home and used it as a deposit on a flat in Hove. She took out a mortgage to cover the remainder of the purchase. The property in question is valued at around £800,000.

The government's independent ethics adviser may want to know if Rayner provided the full facts regarding the trust and her main home to her first tax adviser. The government pays the council tax for the property she classified as her second home.

In December 2024, Rayner was granted the use of a grace-and-favour flat in Admiralty House in Whitehall, and gave up a rented property in London.

Notably, the advice that counts now is that which Sir Laurie Magnus gives to the prime minister.

In 2020, an award was made to Rayner's son, presumed to be financial and potentially made in compensation. A trust was established to manage the award and her son's interests.

This ongoing tax dispute underscores the complexities of property ownership and tax liability, especially when it comes to families with special circumstances. As the situation develops, Rayner continues to cooperate with HMRC to resolve the matter.

The gaffes of Angela Rayner regarding stamp duty taxes are far from being resolved