I was dispatched to the local shop this morning under strict orders from my wife to get some sourdough bread. While there, I couldn’t help but notice that every newspaper front page was screaming about Angela Rayner’s latest stamp duty saga. Then, as I got back in the car, it was all over the radio too.
Clearly, the universe wanted me to pay attention.
So, I did a little digging—and decided to turn her escapades into something useful. Welcome to The Angela Rayner Masterclass in Property Tax Avoidance. Think of it as a a cracking opportunity for the rest of us to learn.
Lesson 1 – Using right to buy to build wealth
In her twenties, Rayner bought her council house under Right to Buy — the big Conservative policy from Margaret Thatcher. Perfectly above board, although the irony could write itself when you consider that Labour politicians have spent decades condemning it.
Right to Buy allows eligible council and housing association tenants to buy their home at a discount if you’ve rented for at least 3 years, with the discount increasing the longer you’ve been a tenant.
She later sold the property in 2015 for a tidy profit of around £48,500. But here’s where the noise began: critics argued she hadn’t been using it as her main residence since marrying in 2010, which could have left her exposed to Capital Gains Tax (since couples can only claim one primary residence for exemption). HMRC eventually looked into the matter and confirmed no tax was due, but the criticism lingered — proof that in politics, sometimes the perception sticks longer than the facts.
So, a nice clean strategy and a reported profit of £48,oo0, albeit at the Governments expense.
Lesson takeaways – if you’ve been renting from the local authority for a while, make sure you check if you are eligible for right to buy. If you qualify, you could make a tidy profit.
If you’re sitting on more than one property, be very careful before you sell anything that isn’t your principal private residence. Your “main home” is usually exempt from Capital Gains Tax, but second properties are not — and HMRC are sticklers for the details (like where you actually live, who pays the bills, and where you’re registered to vote). A poorly-timed sale or misclassification can easily turn into an unexpected tax bill.
Lesson 2 – How to dodge a chargeable lifetime transfer
Next up, the Ashton-under-Lyne family home. A portion of this was transferred into a trust set up for her son who, sadly, has lifelong disabilities.
Now, when you move assets into a trust, HMRC calls it a Chargeable Lifetime Transfer (CLT). If the value exceeds your nil-rate band (£325,000 per person or £650,000 per couple), you could face an immediate 20% IHT bill on the excess.
But guess what? The house just so happened to be valued at exactly £650,000. Handy, that. In fact, I’m surprised this hasn’t been investigated further as valuations are rarely so tidy. A few thousand either way is the norm.
But to land bang on the joint nil-rate band for IHT? That’s the sort of coincidence that makes Yorkshire folk mutter, “Aye, right.”
No tax bill today, and the trust got the asset neat as you like.
Tax takeaway: Valuations should be based on market comparables, not tax allowances. If your property “just happens” to fit the tax-free band perfectly, don’t be surprised if eyebrows lift higher than the Humber Bridge.
Transfers into trust aren’t “free passes.” Get the valuation wrong, and you can trigger IHT straight away. But nail it exactly at the allowance — well, that’s one way to keep the taxman’s pen capped.
Lesson 3: Whose Money Was It Anyway?
Of course, the trust itself was funded by her son’s NHS compensation award. In other words, public money. That trust then paid Angela £162,500 for her share of the house, which she used as a deposit on her new Hove flat.
Tax takeaway: Trusts are powerful tools, especially for vulnerable beneficiaries but if you’re a trustee and also benefiting personally (by selling your share to the trust), you’d better have an independent valuation and some rock-solid paperwork. Otherwise, it looks suspiciously like you’re dipping into the beneficiaries sweet jar.
Lesson 4: Where Did the Residence Nil-Rate Band Go?
Those that are particularly sharp eyed on these issues may be thinking ‘but I thought a married couple could pass on £1 million before Inheritance tax is charged’? So, £325,000 is the normal IHT allowance plus £175,000 of our principal private residence (known as the residence nil rate band (RNRB) right? Well in most cases, yes you’re right – but the RNRB only works IF you leave your home directly to the kids. Once you start putting homes into discretionary trusts, the RNRB often goes out the window.
So if RNRB wasn’t in play here, £650,000 was the max you could shelter.
Tax takeaway: RNRB is generous, but it comes with strings. If your property’s in trust, check whether you’re still eligible. Otherwise, you may find your clever planning has cost you £350,000 of allowance.
Lesson 5: Stamp Duty Land Tax — The £40,000 “Oops”
Finally, the Hove flat. £800,000 of seaside living. Rayner paid £30,000 in Stamp Duty — the standard rate — and thought she was done.
Except she wasn’t. HMRC says if your children’s trust owns property, you’re still treated as owning it too. Which meant she should have paid the 3% surcharge for additional properties, bringing the bill closer to £70,000.
Result? A £40,000 underpayment — which she’s now admitted and promised to repay. Consider it the most expensive “oops” note in recent political history. Although, in her defence, it was her financial advisers or her legal advisers fault…or maybe Boris Johnson or Donald Trump….anyone but Angela basically.
Tax takeaway: SDLT rules are full of traps. Own (or be deemed to own) more than one property, and the 3% surcharge almost always applies. If you think you’ve found a loophole, double-check before HMRC does.
The Final Word
So, what have we learned from Angela Rayner’s accidental masterclass?
– Criticising another parties policies while profiting from them looks hypocritical.
– Trusts don’t wipe away tax rules — in fact, they bring more into play.
– Neat valuations at round-number thresholds invite scrutiny.
– RNRB is powerful, but not if you lock your property in the wrong trust.
– And if you’re buying a 2nd home, don’t forget the 3% stamp duty surcharge.
Because in tax — just like in politics — it’s not only about what you do. It’s about how it looks. And if it looks like you’ve had your cake, sold it, and used your son’s trust to buy another slice in Hove, don’t be shocked when the public gets a bit salty.
Which reminds me, it’s time to get the salt and pepper out for my poached eggs on sourdough bread.
