Deputy Prime Minister Angela Rayner has been cleared of wrongdoing by HM Revenue and Customs (HMRC) over her tax affairs, following an investigation into underpaid stamp duty on her Hove flat. The tax authority concluded there was no tax avoidance, and she has reportedly repaid £40,000 in unpaid tax without incurring a penalty.
Background and Resignation
Rayner resigned from her positions as deputy prime minister and housing secretary in September 2025 amid intense scrutiny over the issue. The controversy erupted after it emerged she had paid the standard rate of stamp duty on her £800,000 flat in Hove, when a higher rate for second homes may have applied. She later corrected the error and settled the outstanding amount.
HMRC Clears Rayner
In an interview with The Guardian, Rayner expressed relief at the outcome: “I felt that voters were left with the impression that I somehow tried to avoid – or worse had been reckless or careless – in my actions. Whereas now hopefully people can see that actually it’s a really complex area of law.” HMRC’s decision clears the way for a potential leadership challenge against Prime Minister Sir Keir Starmer, as discontent grows within the Labour Party following poor local election results.
Leadership Speculation
Rayner did not rule out running in any leadership race but stated she would not “trigger” a contest. “I'll play my part in doing everything we possibly can to deliver the change, because it's not a personal ambition, I know the difference it makes,” she said. When asked whether the prime minister should step aside, she replied: “Keir will have to reflect on that.” Over 90 Labour MPs have called for Starmer to resign or set a departure timetable, with 81 needed to trigger a contest. Health Secretary Wes Streeting is seen as the most likely challenger.
Stamp Duty Rules Explained
Stamp duty is typically straightforward for first-time buyers or those moving home, with rates from 0% to 12% based on property value. For second homes, the rules are more complex: the threshold for standard rates is lowered, and a 5% surcharge applies, rising to a maximum of 17% on properties over £1.5 million.
Why Did Rayner Underpay?
Rayner purchased the Hove flat for £800,000 in May 2025, paying the standard rate of around £30,000. The higher rate for second homes would have made it as much as £70,000. She explained that she had sold her stake in her constituency home in Greater Manchester into a trust for her son, believing she was liable only for the standard rate based on legal advice. However, complex trust provisions meant additional stamp duty was due.
The Trust and Family Arrangements
Rayner sold her 25% share in the family home in Ashton-under-Lyne to a court-instructed trust set up for her son, who has lifelong disabilities including blindness. The trust was established in 2020 after a “deeply personal and distressing incident” involving her son as a premature baby. She used the £162,500 lump sum from the sale as a deposit on the Hove flat. The trust now holds equity in the Ashton house, while Rayner and her ex-husband operate a “nesting arrangement” for their son.
Ethical Adviser's Findings
Ministerial ethics adviser Sir Laurie Magnus noted that while Rayner’s understanding was “held in good faith,” she did not seek specific tax advice, breaching the ministerial code. He added that the interpretation of trust-related tax rules is complex, and Rayner has since paid the full amount owed.
Rayner's Response
Welcoming HMRC’s conclusion, Rayner stated: “I have been exonerated by HMRC of the accusation that I deliberately sought to avoid tax. I set out to pay the correct amount of tax. I took reasonable care and acted in good faith, based on the expert advice I received, and HMRC has accepted this.” She added that she is “relieved that my family can now move on – and that I can get on with my job.”
