The recent resignation of former Deputy Prime Minister Angela Rayner over unpaid stamp duty has put the spotlight back on a complex area of tax law. Rayner underpaid stamp duty on a second home by £40,000, following the purchase of a flat in Hove. The story has since become a textbook example of what can go wrong when unclear advice meets complicated tax rules.
The issue dates back to 2016, when then-Chancellor George Osborne introduced a 3% SDLT surcharge on additional residential properties. This applied to buy-to-lets and second homes, and the rate has since increased to 5% in 2025. While the policy aimed to cool the housing market for first-time buyers, the rules around what qualifies as an “additional property” have proven anything but simple.
A Technical Trip-Up
Rayner’s case centred on her previous home in Ashton-under-Lyne, where she had retained a 25% interest through a trust set up for her disabled child. When she later bought the Hove flat, she did so unaware that this trust arrangement still counted as ownership for stamp duty purposes.
Under Paragraph 12 of Schedule 4ZA of the Finance Act 2003, selling a share of a home to a trust doesn’t necessarily sever legal ties in HMRC’s eyes. The result? The surcharge still applied, and Rayner now faces an additional tax bill plus a penalty for carelessness.
While she had sought informal guidance, she hadn’t obtained formal, qualified tax advice. Unfortunately, that distinction has made a significant difference.
The Broader Lesson for Homeowners
Many homeowners could fall into similar traps. Whether it’s helping a child onto the property ladder, retaining a stake in a former home, or acquiring property through a trust, these are all circumstances that could attract stamp duty on second home purchases without obvious warning signs.
In an environment of changing legislation and tighter enforcement, the safest route is clear, specialist advice.
This story highlights how easily individuals can get caught out by tax legislation, much like the recent pension tax relief changes that have left many needing updated advice.”
Final Thoughts
Tax law isn’t always intuitive, especially where trusts and property ownership intersect. Even high-profile figures can fall foul of rules designed to catch avoidance, not error.
When it comes to stamp duty on second home purchases, especially where other interests or trusts are involved, advice from a qualified expert isn’t just helpful, it’s essential.
You can find the Government guidance on Stamp Duty Land Tax (SDLT) here.