8th September 2025 | Caroline Vernon | Residential Property, Stamp Duty Land Tax, Angela Rayner

There has been a huge amount of controversy this week with regard to Angela Raynor’s underpayment of Stamp Duty Land Tax (SDLT).

The former Deputy Prime Minister, also Housing Secretary, confirmed that she underpaid SDLT on the purchase of an £800,000 flat in Hove in May 2025. It has now emerged that she previously transferred her share of her family home, which she purchased in April 2016, into a trust for their disabled son. Due to very complex provisions for SDLT, Raynor is treated as still owning that property for SDLT purposes, therefore, the 5% additional property surcharge should have been applied.

Ultimately, Raynor did admit to the underpayment of SDLT by £40,000 and referred herself to the independent ethics advisor and began discussions with HMRC about settling the shortfall. Her case and commentary from tax advisors and accountants illustrates how technical SDLT has become and the difficulties that a Residential Real Estate solicitor is subject to in interpreting the legislation on behalf of a client.

The law firm who acted on her behalf is under the spotlight for advice they may or may not have given. Their managing partner gave a statement to the Telegraph and made it clear that they had not given tax or trust advice to their client and critically, is something they always refer onto an accountant or tax expert. In complicated matters it is always prudent to confirm to clients that specialist tax advice should be obtained from either a tax advisor or their accountant looking at the wider picture of additional assets. Certainly, this should be caveated in the scope of works at the outset, to confirm that Residential Real Estate solicitors are not tax advisors and are not giving this advice. SDLT is a personal tax payment, and it is up to the individual to obtain advice albeit we do have the unfortunate job of submitting the SDLT return within 14 days of completion on behalf of a purchaser.

There are incredibly complicated SDLT provisions in terms of mixed use, annexes, multiple dwellings, the ownership of more than one property, and in this situation trusts. The additional SDLT surcharge on second homes is governed by Schedule 4ZA of the Finance Act 2003. Under paragraph 8, individuals may be deemed an owner “major interest” in residential property even when they do not hold a title personally. Legislation provides “a person is treated as having a major interest in a dwelling if it is held in trust for a child (under 18) of the person, or of the person’s spouse or civil partner”. Therefore, if a parent places a property in trust for their minor child, even where this is done by a court order, they may still be treated as owning it when SDLT is calculated on future purchases. This could inadvertently trigger the 5% surcharge for owning multiple properties.

It was the Government’s plan to prevent tax avoidance through indirect ownership structures. However, it catches entirely legitimate trust arrangements including those established for the care of vulnerable and disabled minors. As the SDLT regime has been made so complicated by the Government, who are attempting to close down loop holes for tax avoidance, they have inadvertently made numerous situations where extra payments for SDLT could potentially have been missed. Though the notoriety of this case has certainly put us all on high alert as to the need for SDLT advice in complicated scenarios.

To find out more about Stamp Duty, please contact the Residential Property Team here, or contact Caroline Vernon. 

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