Cleared by HMRC: Reflections on Angela Rayner’s SDLT Position & the “Reasonable Care” Standard

On 14 May 2026, news broke that Angela Rayner, the former Deputy Prime Minister and Housing Secretary, had been cleared by HM Revenue & Customs (HMRC) in connection with the Stamp Duty Land Tax (SDLT) position on her purchase of an £800,000 flat in Hove, East Sussex. As reported by the BBC, the Guardian, and ITV News, HMRC's investigation concluded that Ms Rayner did not engage in “tax avoidance” and was “not careless” within the meaning of the penalty rules, with the result that no penalty has been imposed. She had previously settled the underpaid SDLT of approximately £40,000, together with interest. Speaking to ITV News, Ms Rayner said she had "never wanted to avoid paying my tax” and added that she had been distressed by the suggestion that she had been careless by not taking the appropriate advice.

In 2025, Ms Rayner purchased a flat in Hove in May 2025 for £800,000. She paid SDLT at the standard residential rates, which came to approximately £30,000. The issue arose because, at the time of that purchase, a trust had been set up by court order to manage a financial award for her disabled son. As part of that arrangement, her shares in the family home had been transferred into the trust.

The position later turned on the deeming provisions in Paragraph 12 of Schedule 4ZA of the Finance Act 2003 (FA 2003) under which a parent is treated for SDLT purposes as holding a major interest in any property held in trust for their minor child. As a result, Ms Rayner was deemed to still own an interest in the family home on the date she completed on the Hove flat. That made the Hove purchase a higher rates transaction, attracting the additional 5% surcharge for second homes. The correct SDLT liability was therefore approximately £70,000, leaving a shortfall of £40,000. After advice from a leading tax counsel, the additional tax was paid, and the position was regularised with HMRC.

The point of professional interest is HMRC's conclusion that the inaccuracy in Ms Rayner's SDLT return was not "careless" within the meaning of Schedule 24 of the Finance Act 2007 (FA 2007). Under Paragraph 3 of Schedule 24 of the Finance Act 2007, an inaccuracy is careless where it is due to a failure by the taxpayer to take reasonable care. Where a return is found to be careless, Paragraph 4 of Schedule 24 of the FA 2007 sets the maximum penalty at 30% of the potential lost revenue, and Paragraph 10 of Schedule 24 of the FA 2007 permits disclosure mitigation that may, in the case of an unprompted disclosure of good quality, reduce the figure to nil. The reasonable care test is objective: the taxpayer is required to have taken the care that a prudent and reasonable person in their position would have taken.

Speaking to ITV News, Ms Rayner said: "I have been exonerated by HMRC of the accusation that I deliberately sought to avoid tax. I exercised reasonable care and acted in good faith based on the expert advice I received, which HMRC has accepted." In a separate statement reported by the Guardian, she acknowledged that stamp duty is a "very complex area of tax" and expressed relief that the matter had been resolved.

The Angela Rayner case has reinforced several points for property buyers that property professionals have long emphasised. Where a transaction involves a trust, a minor child, a recent disposal of an interest in a previous home, or a divorce settlement with ongoing property arrangements, generic conveyancing advice is simply not sufficient. The deeming rules of SDLT provisioned by the FA 2003 are not widely understood, and as this case shows, even a learned buyer can fall foul of provisions that are easy to miss. Acting on caveated advice without taking the further step of obtaining specialist input carries real financial risk. As Tax Policy Associates noted in their commentary on 14 May 2026, HMRC's decision is fact-specific and does not alter the legal framework that applies to other taxpayers, nor does it change how the First-tier Tribunal would approach a penalty dispute in a comparable situation. Buyers should not take comfort from this outcome as any indication that HMRC will routinely accept reasonable care arguments where specialist advice was recommended but not obtained.