Angela Rayner says she has been cleared of wrongdoing by HMRC over her tax affairs amid speculation that she may be mounting a leadership bid against Sir Keir Starmer.
She has reportedly settled £40,000 in unpaid stamp duty on her £800,000 flat in Hove after incorrectly paying a lower rate, but has not been made to pay a penalty by the tax authority. HMRC is understood to have concluded there was no tax avoidance.
The former deputy prime minister and housing secretary resigned from her positions in September following intense scrutiny over the issue.
In an interview with The Guardian, she said: “I felt that voters were left with the impression that I somehow tried to avoid – or worse had been reckless or careless – in my actions. Whereas now hopefully people can see that actually it’s a really complex area of law.”
Her clearance now paves the way for a potential challenge against the prime minister, as speculation grows that discontent MPs may launch a leadership contest following last week’s disastrous local election results.
Ms Rayner did not rule out running in any leadership race but added that she would not “trigger” a contest.
She said: “I’ll play my part in doing everything we possibly can to deliver the change, because it’s not a personal ambition, I know the difference it makes.”
Asked whether the prime minister should step aside, she said: “Keir will have to reflect on that.”
More than 90 Labour MPs have now called on the prime minister to resign or lay out a timetable for his departure, with 81 needed to get behind a single candidate to trigger a contest. Health secretary Wes Streeting is seen as the most likely contender against Sir Keir, and is rumoured to be staging a challenge.
Here, The Independent revisits the tax issue that took Ms Rayner away from frontline politics for more than half a year.
What are the rules around stamp duty?
For those buying their first home or moving from one to another, stamp duty is usually quite straightforward. There are several rates liable on the purchase, ranging from zero to 12 per cent, based on its value.
When it comes to second homes, the rules can be more complex. The threshold at which the standard rates need to be paid is lowered, and there is also a 5 per cent surcharge, which can rise with value.
Between £40,000 and £125,000, the surcharge rate is 5 per cent. This rises to a maximum of 17 per cent on properties worth more than £1.5m.
Why did Rayner not pay enough tax on her Hove flat?
Ms Rayner referred herself to the ministerial ethics adviser after admitting that she had wrongly listed her flat.
When purchasing the £800,000 property in Hove in May, she paid the standard rate of stamp duty, estimated to be £30,000. However, the higher rate for second homes would have made this as much as £70,000.
The former deputy PM explained: “When purchasing the property, my understanding, on advice from lawyers, was that my circumstances meant I was liable for the standard rate of stamp duty.”
She said she did this because she had sold her stake in her constituency home in Greater Manchester into a trust of which her son is the beneficiary.
Ms Rayner explained that she then bought the Hove flat, using the £162,500 lump sum from selling her stake in her Ashton-under-Lyne home, where she is MP, “which was the only property I owned and where my savings were”, for the deposit on the new one. She maintains she initially believed, based on legal advice, that she was liable for the standard rate of stamp duty.
However, Ms Rayner was later advised that, despite not owning any other property at the time of the purchase, “complex provisions relating to the trust give rise to additional stamp duty liabilities”.
In his report on the matter, ministerial ethics adviser Sir Laurie Magnus explained: “Having sold her 25 per cent share in the family home in Ashton-under-Lyne, Ms Rayner ceased to own any part of that property. However, under the relevant legislation, a person who does not own a property can nonetheless be deemed to hold an interest in it if certain circumstances apply; these include where that property is held by a trust, and the beneficiary of the trust is a child of that person under the age of 18.
“I understand there are additional complexities, for example, concerning the particular type of trust in question and the reason for which the trust was established. Taken together, it appears that – particularly in the context of the specialist type of trust in question – the interpretation of these rules is complex.”
Mr Laurie added that while he believed Ms Rayner’s understanding of the tax she owed was “held in good faith”, she did not seek specific tax advice and so the “highest possible standards of proper conduct”. It added with “deep regret” that this meant the ethical code had been breached.
Where did Rayner get the money for the Hove flat?
The former deputy PM says she sold her stake in her family home to her son’s trust in January 2025. This gave her the money to pay the deposit for the Hove flat, which she owns with a mortgage.
The court-instructed trust was set up in 2020 using a payment that was granted after “a deeply personal and distressing incident” involving her son as a premature baby, she says. Now in his late teens, he has lifelong disabilities, including blindness.
In a statement, she said: “The trust was established to manage the award on his behalf – a standard practice in circumstances like ours.
“To ensure he continued to have stability in the family home, which had been adapted for his needs, we agreed that our interest in the family home would be transferred to this court-instructed trust of which he is the sole beneficiary.
“Some of the interest in our family home was transferred to the trust in 2023.”
She then sold all of her interest in the Ashton-under-Lyne property to this trust in 2025, although it remains her family home. It is Ms Rayner’s son’s trust that now holds equity in the Ashton house.
What are her family arrangements?
Ms Rayner has two sons with her ex-husband, Mark Rayner, and one from an earlier relationship when she was 16.
After divorcing Mr Rayner in 2023, she agreed to a “nesting arrangement” with her former husband, which means her son remains in the family home full-time while they alternate living there.
The house was only partly put into the trust at this point, with them and the law firm Shoosmiths as trustees.
The deputy PM sold her remaining stake of the Ashton-under-Lyne house to the trust in January, she said, removing her name from the deeds.
What has Rayner said about the HMRC investigation?
Responding to HMRC’s findings, Ms Rayner released a statement on the matter: “I welcome HMRC’s conclusion, which has cleared me of any wrongdoing.
“I have been exonerated by HMRC of the accusation that I deliberately sought to avoid tax.
“When purchasing a home of my own with a mortgage, I did not own any other property and had no personal financial interest in the court-instructed trust set up to manage my son’s financial award. I was advised by experts that I should pay stamp duty at the standard rate.
“I set out to pay the correct amount of tax. I took reasonable care and acted in good faith, based on the expert advice I received, and HMRC has accepted this.
“I have always sought to act with integrity, and I believe politicians should be held to high standards – that is why I resigned from government and cooperated fully with HMRC.
“I wanted to ensure that I paid every penny that I owed, and have done so. I am relieved that my family can now move on – and that I can get on with my job.”
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