Remaining queries unresolved in the dispute over Angela Rayner's tax affairs

Angela Rayner's Stamp Duty Investigation: A Complex Case

Angela Rayner, the Deputy Leader of the Labour Party and Housing Secretary, is currently under investigation for underpaying stamp duty on her second home purchase. The probe is being led by the prime minister's independent ethics adviser, Sir Laurie Magnus.

The controversy arose from Rayner's decision to sell her family home to a trust for her teenage son with lifelong disabilities, which resulted in a complex situation for stamp duty purposes. According to tax barrister Patrick Cannon, it is unclear what advice Rayner provided to her conveyancer when purchasing her Hove flat, and whether they gave her appropriate guidance based on the information she disclosed.

It is also uncertain who Rayner initially consulted for advice, as she has not named them and they are bound by client confidentiality. The question of whether these initial advisors were experts in tax law remains unanswered.

Sean Randall, an independent stamp duty expert, suggests that the intricate nature of our tax laws could lead to a debate about whether stamp duty needs to be changed. Thomas Wallace, director of the WTT tax group, emphasizes the importance of disclosing all relevant facts to an adviser for accurate advice to be given, especially when a person's affairs are complex.

If found to have broken the rules, the consequences for Rayner are not clear. However, if she were to be sacked, a deputy leadership election would be triggered. It is worth noting that Sir Keir Starmer, the Labour leader, has been quick to dismiss ministers involved in wrongdoing, but losing someone as senior as Rayner could be damaging to his operation.

Rayner has claimed that she made an honest mistake when underpaying stamp duty on the purchase of her second home. If she were to face a penalty from HMRC, it would amount to around £40,000 and would signify carelessness rather than dishonesty.

If a trust is set up for a child under 18, the parent is treated as still owning that dwelling for the purposes of stamp duty. In this case, Rayner was treated as the owner of her family home even though it was in a trust for her son. Conveyancers often advise their clients not to rely on their tax advice, but this might depend upon what they know in the first place - and in this case, the trust.

The timeline of when Downing Street became aware of the issue is unclear. Rayner will have to show that she took reasonable steps to get the correct advice and provided all the relevant information to her lawyers to avoid a penalty. There is no publicly available information about which lawyers Angela Rayner consulted when purchasing her second residence in Hove.

The outcome of the investigation will determine if a breach of standards has occurred. Subsequent legal advice stated that the second home surcharge still applied, despite Rayner not technically owning the family home when she purchased the second one. If the investigation finds that Rayner has breached the rules, the consequences for her role in the government remain to be seen.