As has been in the news in recent weeks, several senior MPs are gathering support and readying their bids to succeed Angela Rayner as deputy leader of the Labour Party.
Here, we take a look at what caused Rayner to resign as deputy leader, focusing on her failure to pay the right amount of Stamp Duty Land Tax (SDLT) when buying a property.
As with any complex tax issue, much of the reporting and social media chatter has been fairly confused, so this is a straightforward breakdown of what actually happened, the rules involved, and why it mattered.
The rules around Stamp Duty (SDLT)
Normally, when you buy a property, you pay Stamp Duty Land Tax (SDLT). But there’s an extra charge (often called the higher rates or “second home surcharge”) if you already own another residential property.
This surcharge (an extra 5% on top of the standard rate) applies if all of the following criteria are met:
- The property costs £40,000 or more.
- It isn’t a long lease.
- At the time of purchase, you own another property worth at least £40,000.
- The new purchase isn’t replacing your main home.
If the above criteria apply, but you later sell your previous main home within three years, you can reclaim the extra SDLT paid.
The situation
Rayner’s circumstances were more complicated than a ‘typical’ case. Broadly, her situation was as follows:
- She bought a flat in Hove.
- She also still part-owned a house in Ashton-under-Lyne, which she and her ex-husband once shared as their family home.
- After their divorce, most of the house was transferred into a trust to support the needs of their disabled child, who still lives there.
- In 2025, Rayner sold her remaining share of the house to the trust, for its market value.
Rayner believed this meant that she no longer “owned” the house and so only needed to pay the standard SDLT rate on the Hove flat. Her lawyers filed the tax return on that basis.
The legal catch
The problem, however, is that tax law treats property held in a trust for a minor child differently. Even if the house is technically owned by the trust, parents are still treated as though they own it on the child’s behalf.
This means that legally, Rayner was still classed as owning a share in the Ashton-under-Lyne house at the time when she bought the flat in Hove. This meant that her understanding of the situation was flawed, and the higher SDLT rates applied after all.
The tax bill
As a result, Rayner now owes:
- About £40,000 in additional SDLT.
- Interest (at 8%) because the tax wasn’t paid on time.
This can be fixed by filing an amended return and making payment to settle the previously underpaid tax.
Could there be a penalty too?
In short, yes. When a tax return is wrong, HMRC can apply penalties. The key question is whether the mistake was “careless” (i.e. whether a reasonable person in her position should have done more to check) or not. To that end:
- Rayner did take advice from her conveyancers and trust lawyers.
- Both told her the standard rate applied, but also warned that the issue was complex and suggested that she get specialist tax advice.
- However, she didn’t seek that specialist advice until after the purchase, when questions were already being raised.
Because she ignored those warnings, HMRC could argue that she failed to take “reasonable care”, in which case the penalty is normally 30% of the underpaid tax.
However, if the taxpayer cooperates fully and admits the mistake (known as “disclosure”), HMRC can reduce the penalty, sometimes down to 15%. It seems unlikely she’ll escape without a penalty, but the final figure is uncertain.
What’s the takeaway?
This story highlights one key lesson: when it comes to property transactions, Stamp Duty can become complicated. Even if you’ve got lawyers involved, if they tell you that it’s outside their expertise, it’s best to get specialist advice before filing the return.
For most people, the rules are simple enough. But in cases involving multiple homes, trusts, or children, failing to get the right advice can be a very expensive mistake.
How can Maslins help?
If you’re thinking about making a property purchase, and there are factors in play that might affect your Stamp Duty position, feel free to get in touch and we’ll be happy to advise further.
