Angela Rayner has resigned as deputy Prime Minister and housing secretary after failing to pay enough taxon her £800,000 flat in Hove.
She has also stepped down as deputy Labour leader, a move which is expected to trigger a new deputy leadership election by party members.
Her departure comes after the prime minister’s ethics adviser Sir Laurie Magnus, said Rayner had “acted with integrity” but concluded that she had breached the ministerial code.
He said she did seek legal advice when buying the property but failed to seek further expert tax advice as recommended.
Writing to the PM, Rayner said she accepted she “did not meet the highest standards” when purchasing her property.
“I deeply regret my decision to not seek additional specialist tax advice given both my position as housing secretary and my complex family arrangements.”
Rayner said she took “full responsibility for this error,” adding, “It was never my intention to do anything other than pay the right amount.”
Sir Keir is expected to appoint a new deputy prime minister and a wider reshuffle of other ministers at the top of government has already begun with Lucy Powell and Ian Murray leaving their respective jobs of Commons leader and Scottish secretary.
Details of a deputy leadership election are expected to be announced in due course.
The contest could create a severe political headache for the prime minister, as it has the potential to become a vehicle for MPs and members to voice their discontent at Sir Keir’s leadership.
In a handwritten reply to Rayner, Sir Keir said: “Although I believe you have reached the right decision, it is a decision which I know is very painful for you.
“You have given your all to making the Labour government a success and you have been a central part of our plan to make Britain fairer for working families.
“On a personal note, I am very sad to be losing you from the government. You have been a trusted colleague and a true friend for many years. I have nothing but admiration for you and huge respect for your achievement in politics.”
He concluded that Rayner would remain “a major figure” in the Labour Party.
Conservative leader Kemi Badenoch said, “Angela Rayner is finally gone. But it’s only because of Keir Starmer’s weakness that she wasn’t sacked three days ago.”
Rayner was first elected as an MP for the Greater Manchester constituency of Ashton-under-Lyne ten years ago.
She had been on the Labour front benches since 2015 and took on her government jobs in July 2024, when Labour won the general election.
Her resignation leaves a big hole at the top of government, both as deputy PM and in her role at the housing department where she was responsible for delivering one of Labour’s key pledges – to build 1.5 million homes by the end of the Parliament.
On Wednesday, Rayner acknowledged she had not paid enough tax when buying her East Sussex flat and said the “mistake” came about because she believed it was the only property she owned.
However, due to complex arrangements surrounding a trust for her disabled son, the Hove flat should have been considered to be Rayner’s second home – meaning she should have paid an additional £40,000 in stamp duty.
On Wednesday Rayner said she had sought legal advice when making the purchase but that it had failed to “properly take account” of her circumstances.
She said she had contacted HMRC to work out the additional tax she needed to pay and referred herself for investigation by the PM’s standards adviser.
The Angela Rayner flat row
How it unfolded
April 2016
Rayner buys a house in Ashton-under-Lyne, Greater Manchester, with her then-husband Mark, which becomes their family home.
2020
A court orders that a trust be set up to manage a financial award made to her severely disabled son, reportedly from the NHS, linked to his premature birth.
2023
During their divorce, the couple each decide to transfer some of their share in the family home to the trust set up for their son.
January 2025
Rayner sells her remaining stake in the house to the trust, receiving a lump sum thought to be £162,500.
May 2025
She uses the sum, along with a mortgage, to buy a three-bedroom flat in Hove, East Sussex, for £800,000. According to Rayner, she was advised she would only need to pay the standard rate of stamp duty on the purchase.
Sunday 24 August 2025
The Mail on Sunday and Sun on Sunday report her purchase of the Hove flat, with the Tories calling on her to clarify where she pays council tax.
Thursday 28 August
The Daily Telegraph reports Rayner saved £40,000 in stamp duty by not paying the higher rate reserved for additional home purchases. In the story the newspaper quotes a spokesperson for Rayner saying she paid the “correct duty” on the purchase.
Friday 29 August
The Tories announce they have written to Sir Laurie Magnus, the prime minister’s ethics adviser, asking him to investigate Rayner’s tax affairs. Rayner instructs a senior lawyer to review her tax position that evening.
Monday 1 September – afternoon
Downing Street tells reporters Rayner cannot give further details of her situation due to a court order, which she is “urgently” trying to lift. Shortly afterwards, Sir Keir Starmer rallies round Rayner during a BBC interview, saying he is “proud” of his deputy.
Monday 1 September – evening
The senior lawyer commissioned by Rayner gives a draft opinion on her situation, whilst seeking further information.
Tuesday 2 September – evening
The court order is lifted.
Wednesday 3 September – morning
The senior lawyer’s final legal opinion is received, with Rayner contacting HMRC and referring herself for investigation by Sir Laurie.
Wednesday 3 September – midday
Shortly before Sir Keir is due to appear at Prime Minister’s Questions, Rayner releases a statement admitting she should have paid the higher rate of stamp duty when purchasing the Hove flat. She denies she tried to dodge the extra tax, saying the initial legal advice she received failed to “properly take account” of her tax liability resulting from the nature of her son’s trust.
Wednesday 3 September – afternoon
Sir Keir again backs his deputy, but the Conservatives and Reform UK call for her to resign.
Thursday 4 September
Sir Keir repeatedly refuses to say if he will sack Rayner if the standards adviser concludes she broke the ministerial code.
Friday 5 September
Rayner resigns as deputy prime minister, housing secretary and deputy leader of the Labour party.
In his letter to the prime minister, ethics adviser Sir Laurie said it was “deeply regrettable” that Rayner had not sought the correct tax advice.
He said if such expert tax advice had been received, it would “likely” have advised her that a higher rate of stamp duty was payable.
Sir Laurie concluded, “The responsibility of any taxpayer for reporting their tax returns and settling their liabilities rests ultimately on themselves alone.”
In addition to paying an extra £40,000 in stamp duty, Rayner could also face a possible HMRC fine of £12,000 for a “careless” error in her tax arrangements.
Source: BBC