Explanation for Failure to Pay Stamp Tax

Angela Rayner’s explanation for her failure to pay the right stamp tax for her house in Hove is based on the claim that it was incorrectly advised on her tax procurement when buying the property at the beginning of this year. According to media reports, she had avoided taxes of up to £40,000. She has now adopted new advice and has now classified that she should have paid the stamping tax on secondary homes, whereby she owed the tax of £70,000 for the ownership of £800,000.

Complexity of Domestic Matters

The confusion lies in the complexity of her domestic matters from arrangements that were met for her son, who has "lifelong disabilities" and special educational needs. In 2020, an award was given to Mrs. Rayner’s son, who called a "deeply personal and stressful incident" as premature babies, and a trust was set up to manage the award and his interests. It is not explicitly in her explanation, but it is believed that the "award" was financially substantial and may correspond to compensation.

Trust Arrangements

Ms. Rayner says that she and her husband Mark Rayner at the time undertook to transfer their interest in the family in Ashton-Under-Lyne to the trust, from whom her son is the only beneficiary. In 2023, the couple agreed, but agreed that their children would stay home in the family, while they routinely inserted and moved in to look after them, an arrangement known as a nesting. At that time, Ms. Rayner said that part of her interest in the family’s house had gone to her son’s trust.

Purchase of New Property

In January 2025, the deputy Prime Minister said that she sold her remaining interest in the house in the trust of her son and used it as a deposit on an apartment in Hove worth around £800,000. She took out a mortgage to cover the rest of the purchase. At that time, she said she had taken over tax advice and was informed that, since she no longer had any other property, she only had to pay the standard stamp tax, which would have been around £30,000.

New Advice and Tax Obligations

After media reports last month, she said that she applied for new advice from "Senior Tax Counsel", and she was informed that she was actually obliged to pay the stamping tax on a second home, another 5% flat rate, since she describes "complex provisions" in connection with the trust of her son. The consideration of provisions is a legal device that creates a "legal fiction" in order to simplify complex questions that are often in relation to taxes.

Main Residence and Tax Implications

Ms. Rayner does not indicate any details of the provisions, but an explanation is that if she has rights under the conditions of the trust to live in the family home for life, as her main residence should be treated for the purposes of stamp tax. The guidance of the HMRC to the higher stamp states, the parents of U18 years are treated as owners of residential property, "even if ownership is kept by trust and they are not the trustees". She says that the property of Ashton-Under-Lyne remains her family home, where it is registered for official, financial, and medical purposes.

Government-provided Accommodation

In December 2024, Ms. Rayner received the use of a grace-and-favor apartment in the Admiralty House in Whitehall in her role as deputy prime minister and gave up a rented property in London to collect. She had classified this as her second home for taxpayers’ purposes, which is paid by the government as a result. The advice that now counts is the one that Sir Laurie Magnus gives the prime minister. The government’s independent ethics consultant may want to know whether Ms. Rayner provided the complete facts regarding the trust and her main home for her first tax advisor or whether the error is due to her.