Stamp Duty Lessons from Angela Rayner’s Resignation - Cautionary Tale
Angela Rayner has resigned today after it emerged she had underpaid Stamp Duty Land Tax (SDLT) and the headlines since have focused on the political fallout. However, behind the story lies a cautionary tale for every homebuyer. Stamp Duty is a complex tax, full of technical traps. Acting in “good faith” is simply not enough.
The HMRC applies the rules strictly, and the consequences of a mistake can be severe.
The core issue at the heart of Angela Rayner’s resignation is the higher rates for additional dwellings (often called the “second-home surcharge”).
As of 1 April 2025, those higher rates start at 5% and step up by bands. They apply where, at the end of completion day, you own (or are treated as owning) more than one residential property worth £40,000.
Why Stamp Duty Catches Buyers Out
SDLT is not just a simple percentage of the purchase price. Since April 2025, higher rates starting at 5% apply if, at completion, you own or are deemed to own more than one property. Many buyers wrongly assume that once they move out of their old home, they are in the clear. In reality, HMRC looks at legal and underlying beneficial ownership, including property held in trust or for the benefit of children.
Relief is available where you are genuinely replacing your main residence, but the test is strict. If your former home has not been disposed of, or if you still have an interest in it, then the additional property surcharge will still apply.
Refunds are possible if you sell your previous main residence within 3 years of the new purchase, but claims must be submitted within 12 months of that sale or within 12 months of the SDLT filing date. Missing these deadlines can mean permanently losing thousands of pounds.
The Real Risks of Getting SDLT Wrong
The costs of an error go far beyond paying the tax due. HMRC routinely charges interest and can impose penalties of up to 30% if it decides you did not take “reasonable care” and can be much higher if HMRC believe that there was any deliberate concealment.
In recent years, HMRC has also cracked down on dubious SDLT refund schemes, warning buyers about promoters who misclassify properties as “non-residential” or invent artificial reliefs. In these cases, not only can the refund be clawed back, but buyers can be left liable for penalties and the promoter’s fees. Any unsolicited offers relating to SDLT saving schemes should be treated with caution.
Angela Rayner’s case shows that even senior politicians, advised by professionals, are not immune. For ordinary buyers, the lesson is clear: SDLT advice must be specific, specialist, and obtained before contracts are exchanged.
It is important to not lose sight of the Government’s overarching agenda – to increase revenue by charging more to those who can afford it, and this agenda is being actively enforced.
Why Conveyancers Aren’t Enough
Many people assume their conveyancer provides full tax advice but that is far from the case. In practice, most conveyancers calculate SDLT based on standard circumstances and rely upon factual information provided to them by their clients. Conveyancers typically do not give in-depth guidance on reliefs, surcharges, or complex ownership structures. That gap can prove costly. Buyers purchasing through trusts, with offshore connections, or with more than one property should always obtain bespoke legal as well as separate tax input to avoid hidden liabilities.
Practical takeaways for buyers (and their advisers)
- Get advice early, before exchange. The higher rate analysis depends on your whole fact pattern on completion (ownerships, trusts, minors, spouses and timing). Map it out in writing with an appropriate specialist and keep a file note.
- Stress-test the “main residence” story.HMRC looks at facts. If there’s any trust, child beneficiary or retained interest in the old home, assume the surcharge may apply unless proper analysis shows otherwise.
- Document reliance and scope. If your conveyancer is not giving tax advice, commission a short SDLT opinion or a counsel’s note where the facts are complex.
- Be sceptical of “risk-free” refunds. Check primary sources or reputable guidance before you sign anything and beware success fee reclaim firms.
- Diary the refund window. If you paid the higher rates and plan to sell the old home, calendar the 3-year sale window and the 12-month claim deadline.
How CDS Mayfair Can Help
At CDS Mayfair, we provide more than conveyancing. Our team combines deep knowledge of transactional property law with practical, client-focused legal expertise:
- Stamp Duty– we prepare and file SDLT returns within 14 days, ensuring deadlines are met. We are able to identify potential problems and pitfalls at an early stage and can work with reputable tax advisors and accountants to implement lawful solutions to mitigate tax liabilities.
- Specialist property expertise – advising on freehold and leasehold transactions, refinancing, auctions, and high-value prime London property.
- Clear, pragmatic guidance guidance on whether the higher rates may apply, potential refund eligibility, application of main residence replacement relief and the non—resident surcharge.
- Tailored solutions – access to a trusted network of tax advisers, trustees, surveyors, and barristers where additional expertise is needed.
- Client-focused service – responsive communication, transparent advice, and strategies aligned with your commercial and personal goals.
Conclusion
SDLT is not just another cost of buying a home, it is a legal and tax risk that requires careful consideration and management. The Angela Rayner saga illustrates how damaging mistakes can be, both financially and reputationally. If a former Deputy Prime Minister can fall foul of SDLT through a complex fact pattern and imperfect advice, any buyer can. For anyone purchasing property, particularly in the prime London market, early specialist advice is the best form of insurance against problems later on.
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