HMRC clears Rayner of tax wrongdoing as Labour leadership contest looms
Inquiry concludes no deliberate wrongdoing or carelessness found, though Rayner pays additional £40,000 to resolve liability for higher second-home rate.
HM Revenue and Customs has concluded its inquiry into UK Deputy Prime Minister Angela Rayner’s stamp duty affairs, clearing her of any deliberate wrongdoing or carelessness. The resolution removes a significant administrative obstacle to her potential return to frontline politics and clears the path for a leadership challenge against Prime Minister Keir Starmer, whose grip on power is described as unravelling.
The investigation centred on an £800,000 flat in Hove purchased in April 2025. Rayner initially paid the standard stamp duty rate of £30,000, with part of the purchase funded by proceeds from selling her 25% share in a family home in Ashton-under-Lyne to a trust established for her disabled son. The trust was created by court order following damages awarded to her son after a medical incident in infancy.
Following media scrutiny, Rayner accepted liability for the higher second-home rate, paying an additional £40,000 to reach a total of £70,000. While HMRC levied no penalties due to the absence of negligence, Rayner’s ethics adviser, Laurie Magnus, described the failure to seek specialist tax advice as “deeply regrettable”. Rayner’s lawyer, Graham Aaronson KC, argued that HMRC was applying too strict an interpretation of the law, citing paragraph 12 of Schedule 4ZA of the Finance Act 2003.
The legal argument relied on the legislative intent behind the trust exemption for disabled children. Rayner’s team quoted former Treasury minister Stephen Stride, who stated the provision was meant to provide help in relation to the interests of disabled children where a court-appointed trustee buys a home. Although the specific wording of the Act applies to trusts appointed by the Court of Protection under the Mental Capacity Act 2005, her lawyers claimed the spirit of the law supported a wider application.
Rayner opted not to appeal the assessment, avoiding a lengthy legal process that would have extended beyond any potential Labour leadership race. Her lawyers indicated she had a realistic chance of success in court, but HMRC made clear it would contest such a case. By accepting the assessment, Rayner avoids further delay and is now free to play a full role in any leadership challenge, having publicly urged Starmer to reflect on stepping aside due to the insufficient pace of change.