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Angela Rayner, until recently the Deputy Prime Minister and Housing Secretary, purchased a seaside flat in Hove for £800,000 in May 2025. She paid £30,000 in SDLT, assuming it was her main residence. However, it turns out she should have paid the higher rate—£70,000—because the purchase qualified as a second home under SDLT rules.
That’s a £40,000 underpayment. Ouch.
The 5% SDLT surcharge applies when someone buys an additional residential property and owns another at the end of the day of the transaction. There’s an exemption if the new property replaces a previous main residence sold within the last three years. Nicky and I will rely on this exemption ourselves!
Rayner believed she qualified for the exemption because she had sold her remaining interest in her family home in Ashton-under-Lyne to a trust for her disabled son earlier in the year. But here’s the catch: under SDLT legislation (specifically paragraph 12 of Schedule 7ZA to the Finance Act 2003), she’s still treated as owning the property held in trust for her minor child.
Let’s break it down:
• 2020: Rayner sets up a trust for her son, using compensation funds from a court settlement.
• 2023: She divorces but continues to co-parent in the family home.
• January 2025: Sells her remaining 25% stake in the Ashton-under-Lyne home to the trust.
• May 2025: Buys the Hove flat, pays standard SDLT rate.
• August 2025: Media reports raise questions about the SDLT payment.
• September 2025: Rayner admits the error, refers herself to the ethics adviser, and resigns from her ministerial role.
Rayner says she relied on legal advice from conveyancers and trust specialists. But there’s no indication she sought specific SDLT advice before submitting her return. That’s a crucial oversight.
If I’m being generous, I’d say conveyancers often imply they’re covering SDLT, but their engagement letters usually exclude tax advice. If I’m being blunt, someone in Rayner’s position, with multiple properties and a complex trust arrangement, should have gone above and beyond to ensure compliance.
At Lexington, we always advise clients to seek specialist tax and SDLT advice when the situation is anything but straightforward. Nicky and I did exactly that for our new purchase, and it gave us peace of mind.
This isn’t just a political scandal, it’s a reminder that tax law is nuanced, and assumptions can be costly. Whether you’re a cabinet minister or a private investor, the principle remains the same: get the right advice, from the right experts, at the right time.
If you’re navigating property transactions, trusts, or anything that feels a bit “grey,” let’s talk. We’re here to help you avoid the pitfalls and make confident, informed decisions.
