UK deputy prime minister resigns after underpaying property tax

MANCHESTER, England (CN) — Deputy Prime Minister Angela Rayner resigned on Friday after failing to pay the full tax due on a new apartment, marking the highest-profile exit from Prime Minister Keir Starmer’s floundering Labour government.

Rayner, who was also the housing secretary, had referred herself to the prime minister’s ethics adviser earlier this week, after admitting to underpaying stamp duty on her $1 million property.

Stamp duty is a tax paid in England when someone buys property or land over a certain price — similar to a real estate transfer tax in the U.S.

Rayner’s resignation prompted a domino-effect reshuffling of Starmer’s cabinet. After her departure was revealed Friday, the prime minister announced David Lammy to replace Rayner as deputy prime minister. Yvette Cooper will take over the foreign secretary role from Lammy while Shabana Mahmood will assume Cooper’s position as home secretary.

An inquiry by the prime minister’s ethics adviser, Laurie Magnus, found Rayner had broken the ministerial code and “cannot be considered to have met the highest possible standards of proper conduct.”

In her resignation letter, Rayner took “full responsibility for this error,” stating that “it was never my intention to do anything other than pay the right amount.” She regretted not seeking additional specialist tax advice given her role in the government and her “complex” personal situation.

Rayner paid $40,000 in stamp duty on her apartment in Hove after listing the south England property as her primary residence. However, because she also co-owned another property in Ashton, Greater Manchester, she should have paid the higher “second home” rate of $94,000.

The former deputy leader chalked up the error to legal advice that didn’t take into account her personal circumstances.

Before purchasing the apartment, she had set up a trust for her son who has special educational needs. In the U.K., a trust can hold property on behalf of someone else but the law still treats Rayner as an owner of the property.

That meant she was effectively counted as owning two homes, even though one was not for her own use. This technical detail triggered the higher stamp duty rate, which she did not pay at the time.

Rayner’s resignation is another blow to the Labour government at a time when government approval has never been lower.

Since coming into power in July 2024, there have been 11**** resignations or sackings from Starmer’s government.

Last month, Homelessness Minister Rushanara Ali resigned following reports she evicted her tenants before increasing the rental price.

Rayner was seen as a left-wing counterweight to Starmer and widely regarded as a potential future party leader. Growing up in poverty in Greater Manchester, Rayner left school without any qualifications. She worked as a care worker while rising through the ranks in the Unison union before being elected to Parliament in 2015.

Starmer had originally stood by Rayner but took action following the ethics adviser’s conclusion.

He told Rayner in a letter that he was “very sad” to see her exit the government and that she would continue to be a “major figure” in the Labour Party. He also praised her for referring herself to the independent adviser.

Courthouse News reporter James Francis Whitehead is based in England.

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