Why did Angela Rayner resign? Deputy PM triggers Labour reshuffle after tax scandal

Angela Rayner, one of the key figures in the Labour government, has resigned after Sir Keir Starmer’s ethics adviser found the deputy prime minister had breached the ministerial code over her underpayment of stamp duty on a seaside flat in Hove.

Her resignation sparked a major cabinet reshuffle, with home secretary Yvette Cooper replacing David Lammy as foreign secretary and Lammy replacing Rayner as deputy PM.

Rayner, who now faces the prospect of a substantial tax bill, said in a statement on Friday that “I deeply regret my decision to not seek additional specialist tax advice” and said she took “full responsibility for this error”.

Why did Angela Rayner resign?

Rayner was left with no option but to quit after standards watchdog Sir Laurie Magnus found she had breached the ministerial code.

He said she had failed to “heed the caution” contained within legal advice she received when buying the £800,000 property in May, “which acknowledged that it did not constitute expert tax advice and which suggested that expert advice be sought”.

Rayner, who was also housing secretary in Starmer’s government, did not do this. She subsequently consulted a “leading tax counsel” after headlines about her tax affairs had emerged, who found she had been liable to pay a higher stamp duty rate.

Rayner admitted she paid as much as £40,000 less stamp duty on the purchase than she should have done.

How did Angela Rayner avoid stamp duty?

Rayner disclosed earlier this week that she had bought the Hove property after selling her stake in the family home in Ashton-under-Lyne in January 2025 to a trust set up to support her disabled son.

After selling her stake to the trust, Rayner bought the Hove property in May 2025, using the lump sum from the previous sale.

Rayner declared that her Ashton-under-Lyne home remained her primary residence because, she said, the property continued to be her family home.

However, under the complex arrangement, the Hove property should have been considered a second home, meaning she was liable for the higher rate of stamp duty.

But Rayner said she had believed, on legal advice, she was liable for the standard rate of stamp duty.

Sources close to Rayner said a conveyancer and two experts in trust law had all suggested the amount of stamp duty she paid on the Hove property was correct. Conveyancing firm Verrico and Associates, said its lawyers “never” gave Rayner tax advice and were being made “scapegoats”.

Managing director Joanna Verrico said: “We’re not qualified to give advice on trust and tax matters and we advise clients to seek expert advice on these.”

Rayner ultimately conceded she had made a “mistake” after fresh legal advice from the “leading tax counsel” confirmed the error this week.

Starmer launches reshuffle

Starmer later launched into the biggest reshuffle of his premiership with a series of high-profile sackings, demotions and promotions.

Foreign secretary David Lammy, known for his close association with the Donald Trump/JD Vance administration in the US, was demoted to justice secretary and selected as Rayner’s replacement as deputy PM.

Home secretary Yvette Cooper is the new foreign secretary, with previous justice secretary Shabana Mahmood taking Cooper’s old job.

Lucy Powell and Ian Murray were sacked as leader of the House of Commons and Scotland secretary respectively.

Is Angela Rayner still an MP?

Yes. Rayner remains the MP for Ashton-under-Lyne in Greater Manchester, which she has represented since her election to the Commons in 2015. She will now sit on the Labour backbenches.

As well as resigning from government, Rayner also quit as deputy leader of the Labour Party, a role she held since 2020, when she was elected at the same time as Starmer.

Yahoo UK’s live coverage has ended. Read below’s account of the dramatic day