Angela Rayner on the brink: Deputy PM underpaid stamp duty on purchase of £800,000 property 

Deputy prime minister Angela Rayner has referred herself to the standards watchdog after she admitted to underpaying stamp duty on her second home in Hove. 

A spokesperson for Keir Starmer has refused to confirm the date Rayner informed the Prime Minister about her tax dealings, raising questions on when he found out about new tax advice offered to the deputy prime minister. 

As late as Wednesday morning, officials said she had paid the “relevant duty” and claims suggesting otherwise were “entirely without basis”. 

Rayner said she was able to speak up after a court order that had prevented her from revealing details about her complex property affairs was lifted on Tuesday night. 

The purchase of her seaside flat in Hove, which cost around £800,000, led to an underpayment in tax of some £40,000 following poor advice, an error she said she “deeply regretted”. 

Controversy over Rayner’s tax affairs come as the government looks set to reform taxes on home-owners in an effort to raise at least £20bn in extra revenue. 

It also engulfs Labour in another hypocrisy row that puts Starmer under further scrutiny after he said the government had entered “phase two” of its plan to reform the UK. 

During PMQs on Wednesday, the prime minister said he was “proud to sit alongside” Rayner as he said she had gone “over and above” to provide the ethics watchdog with details of her unpaid tax. 

In a statement, Rayner said she was working with tax experts and HMRC to review her dealings as she transferred assets in the aftermath of her 2023 divorce. 

“I deeply regret the error that has been made,” she said. 

“I am committed to resolving this matter fully and providing the transparency that public service demands.”

Politically awkward revelation 

The situation is particularly awkward for Rayner, given her role as housing secretary, in advance of a number of likely contentious tax changes. 

Rumours of property tax reform at the Budget – confirmed to be held on 26 November – are swirling, with a possible capital gains tax on the sale of homes over £1.5m and a levy on landlords’ income on the table. 

The Chancellor is reportedly considering replacing stamp duty with a new national property tax. 

In an interview with Sky News, the deputy prime minister said she was “devastated” as she had made a decision based on erroneous advice. 

A row over her tax affairs first broke out in 2024, with recent weeks throwing a spotlight on her second home, her voting registration and tax avoidance tactics. 

Complicated business

Heather Powell, a partner at advisory firm Blick Rothenberg said: “We can all feel for Angela Rayner. She did exactly what her lawyers told her to do, paid the tax they told her was due and has been caught by the complexities of one element of the UK tax legislation.

“The complicated rules regarding the stamp duty land tax have caught out her and her lawyers.

“The case for a review of our tax legislation to make sure it is clear, easy to follow and logical has been made very clear by these events.”

However, Andrew Marr, managing partner at the tax firm Forbes Dawson, told The Times: “This all centres around the use of trusts and the application of the 5 per cent surcharge.

He said: “It appears Ms Rayner was actively aiming to avoid this stamp duty land tax by ensuring she had no interest in the Ashton-under-Lyne property when she acquired the Hove apartment.”

Front and centre at PMQs 

Kemi Badenoch asked Starmer, “Why is she still in office?”

The PM said: “I know from speaking at length with the Deputy Prime Minister, just how difficult that decision was for her and her family, but she did it to ensure that all the information is in the public domain.

“I can be clear, I am very proud to sit alongside a Deputy Prime Minister who is building 1.5m homes, who is bringing the biggest upgrade to workers’ rights for a generation, and has come from a working class background to be Deputy Prime Minister.”

In a post on X, Badenoch said: “If Keir Starmer had a backbone, he’d sack Angela Rayner immediately. She has to go.”