“It is a truth universally acknowledged that a Housing Secretary in possession of a seaside flat must be in want of a tax plan.”
Angela Rayner’s resignation as Deputy Prime Minister and Housing Secretary has dominated the news this week. The cause was not a clash of political ideologies, but the mechanics of property and tax law: the underpayment of Stamp Duty Land Tax (SDLT) on the purchase of a flat in Hove.
What Went Wrong
At the heart of the matter is the application of the Finance Act 2003, including deeming provisions that can treat property held for a minor as being owned by the parent for SDLT purposes. Where family arrangements, trusts and multiple properties intersect, the “obvious” answer is often the wrong one.
In this case, Ms Rayner had transferred her interest in her former family home in Ashton-under-Lyne into a trust for her son, who is a minor with lifelong disabilities, shortly before purchasing the Hove flat. Although she believed she no longer “owned” the Ashton property, the law deemed otherwise: for SDLT purposes, parents are treated as owning any residential property held in trust for their children under 18. That meant the Hove flat was not a replacement main residence but an additional dwelling, attracting the 3% surcharge.
The result was an underpayment of around £40,000.
The Role of the Conveyancers
This was not a solitary miscalculation. Ms Rayner had instructed a small, family-connected licensed conveyancer practice, rather than a multi-disciplinary firm of solicitors. Each side has sought to distance themselves in this matter; where the balance of responsibility lies is not for us to determine here
For practitioners, this raises a deeper point.
The conveyancing solicitors at Bishop & Sewell, for example, do not provide tax advice. That is not our role. But it is our role to recognise when the facts of a transaction require it. Our duty is not simply to “get the deal done”, but to advise, to protect and to examine — sometimes firmly:
- Who will actually own any property, both legally and beneficially?
- Are there minors or trusts involved?
- Could the SDLT deeming rules apply?
- Should the client obtain formal written advice from a tax specialist before exchange of contracts?
In other words: we must know when tax advice is needed, ensure the client understands why, and direct them to the right expertise. Clients, in turn, must be clear and upfront about their arrangements — particularly trusts and family property interests — so the right questions can be asked.
Put plainly: tax is taxing. Without clarity at the outset, it is all too easy to fall into the traps of SDLT’s deeming provisions.
SDLT: From Simple Duty to Complex Minefield
Part of the challenge is that SDLT is often assumed to be “just part of conveyancing.” Historically, that assumption made some sense. When introduced in 2003 to replace stamp duty, SDLT was relatively straightforward — a simple tiered tax based on purchase price. Completing the return was routine, and conveyancers typically handled it as part of the transaction.
But over time, successive governments layered in complexity:
- Progressive rates replace the tiered system (2014).
- Higher rates for second homes (2016).
- Special rates for first-time buyers (2017).
- Non-resident surcharges (2021).
- Temporary “holidays” during the pandemic.
- Detailed anti-avoidance deeming rules involving trusts, minors, and beneficial interests.
What was once a straightforward calculation is now a minefield of exemptions, surcharges, and deeming provisions. The legislation is intricate, the guidance dense, and the penalties for error significant.
Clients often still assume that SDLT is “just part of conveyancing,” but the reality is that the modern tax has outgrown the traditional conveyancing process. While we can complete the forms and handle payment logistics, we cannot give tax advice — our role is to spot when specialist advice is required and make sure the client is guided to it.
SDLT Deeming Rules — Explained (At a Glance)
- Higher rates (“additional dwelling” surcharge). An extra 5% applies if, at completion, the purchaser owns another dwelling and is not replacing their only or main residence.
- Minors and trusts. Property held for a child under 18 is treated as owned by the parent for SDLT purposes.
- Spouses and civil partners. Broadly treated as one unit: if one owns another dwelling, both are treated as owning it.
- Beneficial vs legal ownership. SDLT looks to beneficial ownership; trusts and nominee arrangements count.
- Replacing a main residence. Relief may apply if the old home is sold and replaced within three years; strict conditions apply.
- Overseas property counts. Ownership of homes abroad is included in the surcharge test.
(This overview is general information, not advice. SDLT outcomes turn on precise facts; specialist tax input is often essential –— which is, after all, the lesson here)
Choosing the Right Adviser
There is also a wider lesson in adviser choice. Sensitive or complex transactions — whether involving trusts, high-value assets, or high public profile — demand advisers who can identify the tax and reputational dimensions as well as the legal mechanics. A smaller or more generalist practice may not always be equipped to flag when external advice is required. Ensuring the right team is in place from the outset can prevent serious problems later.
Lessons for Practitioners and Clients
- Probe, don’t just process. Asking searching questions about beneficial ownership and trusts is part of the job.
- Know when to bring in tax experts. Conveyancers must flag the need for advice; clients must be transparent about their circumstances.
- Get the right expertise, at the right time. Where minors, trusts or multiple properties are in play, seek specialist tax advice before exchange.
- SDLT is no longer simple. Its complexity has grown; assumptions that it is “just conveyancing” are misplaced.
- Match the team to the transaction. Sensitive or complex purchases warrant advisers (and scopes) that cover tax and reputational angles, not just title and completion mechanics.
A Final Reflection
While the political commentary will move on, the underlying professional lesson endures: SDLT is a detailed statutory regime with traps for the unwary, and scope ambiguity can be as dangerous as a drafting error. As for the people who have commented that matters might have ended differently had Ms Rayner instructed the Hound at Bishop & Sewell — well, they may think that, but I couldn’t possibly comment.
Contact our Residential Property team
For more information about Bishop & Sewell’s residential property services please contact Charlie Davidson Senior Associate in the firm’s Residential Property team: cdavidson@bishopandsewell.co.uk or follow Charlie on LinkedIn.
The above is accurate as at 05 September 2025.
The content of this note should not be considered legal advice and each matter should be considered on a case-by-case basis.
