Special care needs to be taken where trusts are involved.
When I first heard suggestions, on 29 August 2025, that Angela Rayner might not have paid the full amount of SDLT due on the purchase of her flat in Hove in May 2025, the story seems to be framed about this being her ‘second home’, with her main residence being in her constituency home in Ashton-under-Lyne where her children live. The press were linking the ‘second home’ council tax treatment of the flat in Hove with the amount of SDLT due on its purchase.
As the story evolved however, the SDLT issues were not about which property she lived in as her main residence. The extra 5% SDLT (which for a purchase of £800,000 would be £40,000) is not due simply because a property bought is intended to be used as a second home. An important condition for the 5% extra to be due is that the buyer has an interest in another property, or is deemed to have an interest in another property. Facts emerged piecemeal, and it became apparent that Angela Rayner had sold her remaining share in the Ashton-under-Lyne property to a trust a few months before. That meant the Hove property was the only property she owned (even though there were a number of homes she could live in, including a flat in Admiralty House which came with her ministerial job). On the face of it that would suggest that the 5% surcharge, which is a charge for additional properties (not a charge for second homes), would not apply on the basis that, when she bought the flat in Hove, that was her only property.
However, there are a number of deeming rules within the SDLT 5% surcharge legislation; one of them treats a person as holding a property if it is held for a child of theirs under the age of 18, or is held in trust, with such a child having a right under the trust to live in the property for life or a right to the income (FA 2003 Sch 4ZA paras 10 and 12). It seems from what we now know that part of the property is held in a trust for a minor son of Angela Rayner, which meant that she should have paid the higher rates of SDLT on the Hove purchase. She was not able to rely on the rules about a ‘replacement of main residence’, as she had made clear she did not intend to live in the Hove property as her only or main residence.
The case is an illustration of how care needs to be taken with the rules for SDLT where there are other properties or trusts involved and how the loose use of the expression ‘second home’ can cause confusion when used in different contexts, such as for council tax and for SDLT.
Special care needs to be taken where trusts are involved.
When I first heard suggestions, on 29 August 2025, that Angela Rayner might not have paid the full amount of SDLT due on the purchase of her flat in Hove in May 2025, the story seems to be framed about this being her ‘second home’, with her main residence being in her constituency home in Ashton-under-Lyne where her children live. The press were linking the ‘second home’ council tax treatment of the flat in Hove with the amount of SDLT due on its purchase.
As the story evolved however, the SDLT issues were not about which property she lived in as her main residence. The extra 5% SDLT (which for a purchase of £800,000 would be £40,000) is not due simply because a property bought is intended to be used as a second home. An important condition for the 5% extra to be due is that the buyer has an interest in another property, or is deemed to have an interest in another property. Facts emerged piecemeal, and it became apparent that Angela Rayner had sold her remaining share in the Ashton-under-Lyne property to a trust a few months before. That meant the Hove property was the only property she owned (even though there were a number of homes she could live in, including a flat in Admiralty House which came with her ministerial job). On the face of it that would suggest that the 5% surcharge, which is a charge for additional properties (not a charge for second homes), would not apply on the basis that, when she bought the flat in Hove, that was her only property.
However, there are a number of deeming rules within the SDLT 5% surcharge legislation; one of them treats a person as holding a property if it is held for a child of theirs under the age of 18, or is held in trust, with such a child having a right under the trust to live in the property for life or a right to the income (FA 2003 Sch 4ZA paras 10 and 12). It seems from what we now know that part of the property is held in a trust for a minor son of Angela Rayner, which meant that she should have paid the higher rates of SDLT on the Hove purchase. She was not able to rely on the rules about a ‘replacement of main residence’, as she had made clear she did not intend to live in the Hove property as her only or main residence.
The case is an illustration of how care needs to be taken with the rules for SDLT where there are other properties or trusts involved and how the loose use of the expression ‘second home’ can cause confusion when used in different contexts, such as for council tax and for SDLT.
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