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Deputy Prime Minister Angela Rayner is facing potential fines from tax authorities and an additional £40,000 in underpaid stamp duty, experts have warned. Rayner, who oversees housing, acknowledged that she paid less stamp duty than required on her £800,000 flat in Hove, East Sussex, attributing the error to poor advice.
HM Revenue and Customs (HMRC) can impose penalties for underpaid tax due to carelessness. Penalties, usually 20% to 30% of the underpaid amount, could be determined based on whether appropriate legal counsel was sought. Rayner has asserted that she was given inaccurate guidance by lawyers, but questions loom over whether she consulted with tax specialists.
The controversy centers on Rayner’s purchase of a three-bedroom flat in Hove in May of this year for £800,000. She claimed it was her sole property, resulting in a £30,000 stamp duty payment rather than the £70,000 required for a second home. Rayner divested her stake in her family home, involving a trust established in response to a medical crisis affecting her son. Despite the selling of her stake, complications arose regarding the stamp duty treatment of the Hove property due to the trust’s existence.
Legal advice sought by Rayner during the property acquisition is under scrutiny. If the advice was limited to conveyancing without tax expertise, she may struggle to demonstrate due diligence and avoid severe penalties. Uncertainty surrounds whether the nuances of the trust arrangement were disclosed to the conveyancing lawyer. Observers speculate that fines are likely, with tax officials demanding access to the advice relied upon by Rayner. The outcome of the standards watchdog inquiry, given her previous stance on tax avoidance, could have significant repercussions
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