Angela Rayner forced to resign as deputy prime minister for underpaying SDLT’

The issue
 
The issue all revolves around the stamp duty land tax (‘SDLT’) position on Angela Rayner’s purchase of a seaside flat in Hove and the question of whether she was liable for the ‘second home SDLT surcharge’ of £40,000 (5% of the £800,000 cost of the home).
 
The 5% surcharge is broadly meant to apply to a purchaser of a second property. The default position is that the charge will apply if the purchaser owns two or more dwellings at the end of the day of the purchase. The main exception to this rule is where the replacement of main residence exemption applies. This can apply if a previous main residence has been disposed of within three years of the acquisition of a new property which is intended to be a replacement main residence.
 
Rayner has now admitted that the surcharge should have been due on the Hove property. Below I try to entangle what really happened.
 
Facts presented by Rayner and the SDLT analysis
 
1. In 2020 Rayner placed some of her family home into a trust for her minor child.
2. In 2023 she got divorced (but still continued to co-parent in the family home).
3. In January 2025 Rayner sold the remaining portion of her family home to the trust.
4. In May 2025 she acquired the Hove property for £800,000 but did not pay the 5% SDLT surcharge equating to £40,000.
 
Having sought the advice of ‘expert legal counsel’ after the event, Rayner accepts that she should have paid the surcharge. The real reason for this lies in the SDLT legislation (paragraph 12 of Schedule 7ZA to Finance Act 2003). This essentially says that for the purposes of the rules Ms Rayner is still treated as holding the property that is in trust for her minor child, such that the surcharge applied. Interestingly, she would have been OK if the trustees had been acting under powers granted by a court appointment in respect of the child under the Mental Capacity Act 2005, but presumably this was not the case.
 
WSM’s view
 
Rayner mentioned that she sought specialist trust advice and conveyancing advice at the outset.  She also says that expert SDLT advice was sought after the media furore kicked off.  However, following her resignation it is clear that she did not seek proper SDLT advice before submitting her SDLT return. Ultimately the failure to take proper professional advice was regarded as a breach of the ministerial code and she was forced to resign.
 
Conveyancing solicitors sometimes give the impression that they are providing SDLT advice, even though this is usually expressly excluded in the terms of engagement. A UK house buyer should always be advised to seek proper SDLT advice, particularly when their affairs are complicated.