Our now former Deputy Prime Minister and Secretary of State for Housing, Communities and Local Government, Angela Rayner, had a long history of denouncing Conservative politicians for tax avoidance. Yesterday she had to resign for not paying enough Stamp Duty. This was not because she accidentally wrote the wrong figure on the cheque – showing my age, there – it was because she engaged in a complicated tax avoidance scheme uncovered by the Daily Telegraph:
Angela Rayner saved £40,000 in stamp duty on her new seaside flat after telling tax authorities it was her main home, The Telegraph can disclose.
The Deputy Prime Minister is understood to have removed her name from the deeds of her house in Greater Manchester a few weeks before buying an £800,000 seaside flat in Hove, East Sussex.
The changes enabled Ms Rayner to avoid paying £70,000 in stamp duty, which would have been applicable if Hove was her second home. Instead, she is thought to have paid £30,000 in stamp duty, saving her £40,000 in the process.
But she has also told Tameside council in Manchester that her constituency house remains her primary residence and informed Brighton and Hove council that her apartment there was a second home for council tax purposes.
There were some other financial shenanigans to do with a trust fund for her disabled son going on as well, but they are secondary to the main point.
I am always saying “incentives matter”. All human history demonstrates that in the long run, they do. But all human history also demonstrates that in the short run, they frequently don’t. Angela Rayner was a left-wing Housing Minister whose public speeches often denounced other MPs for legally avoiding – let alone illegally evading – tax. One would have thought that she would have foreseen that unfriendly eyes were going to scrutinise her own payment of a property tax, and would have arranged her affairs accordingly.
It’s arrogance- chances are she got away with this sort of thing all through her career and was never pulled up on it, so assumed she’d always be protected by the unions and the media.
Arrogance, yes. Allowed to rise too high by those whose purpose she serves as some sort of unholy fool. And too thick to know that she doesn’t know how things work a those heights..
Because she only has eyes for her. Recent interviews, press statements, excuses have all been about her and her triumph over humble origins.
I can add nothing to the above three comments. So I added it anyway! Daft bint could have been the new Nick Clegg but she threw it all away over 40 grand!
The press generally gave Starmer and his cabinet softball treatment before going into office. The stuff about Rachel Reeves ‘ CV being exaggerated for example I’m sure could have been found out by the media before the 2024 election had the media been inclined to do so. As soon as they’d been in office for a few months and the slightest scrutiny was applied, all the petty scandals started to quickly come out. Starmer and the Arsenal tickets, Reeves’ CV, and now Rayner’s tax dodging.
And David Lammy is deputy PM. One awaits with breathless anticipation the outcome of his towering intellect being applied to the problems of the day. Still, could have been worse, could have been “special” Ed.
NickM writes, “Daft bint could have been the new Nick Clegg but she threw it all away over 40 grand!”
Oh, she’ll be back after a few years. Remember how Peter Mandelson resigned in 1998 over an undeclared loan from a cabinet colleague, came back in 1999 and resigned again in 2001 over accusations that he had abused his position to get Srichand Hinduja a British passport?
There is an important distinction to be made:
* All incentives matter in the long run;
* But “long-term incentives” (ie those incentives that do not promise reward or punishment in the short run) matter in the short run ONLY to far-sighted people.
— Nor is Angela Rayner the only short-sighted person who is smart enough (high IQ) to be in a position of power.
Just think of all the people who covered up for the rape gangs.
Or, looking at the US, just think of the “Russiagate” hoax; the Trump impeachments; the 2020 election fraud; the Jan.6 hoax; the claim that Biden was mentally functional; and so on and on and on.
“There were some other financial shenanigans to do with a trust fund for her disabled son going on as well, but they are secondary to the main point.”
I’m not so sure about that.
There is a very serious issue at stake – AR is the trustee of a trust that holds her son’s medical negligence award monies, and also a 50% share in the house in which he lives. As such she is legally bound to manage those assets in his best interests. Not to use them as a piggy bank when she needs some cash. Was it in her son’s best interest to swap £162.5k in cash (which can generate an income for his ongoing expenses, quite possibly £8k/yr, or pay for capital items he might need) for a 25% share in a house he already owns 50% of and that will generate him no income and cannot be spent at all? Not only that, how was the figure at which the house was valued for the sale of AR’s 25% share arrived at? Was a formal valuation of the property done? Or did they just use the value as agreed at the time the trust was set up 2 years before? It seems the 2023 value of £650k for the house was over the top at the time, and still is, given other house sales in the area. So there appears to be a significant chance that the trust overpaid for the 25% share, which it didn’t really need in the first place.
How can all the above be consistent with the trustees discharging their duty of care to the trust’s beneficiary?
https://www.newstatesman.com/politics/2024/05/i-looked-into-angela-rayners-tax-affairs-heres-what-i-found
Even the New Statesman concedes that she was at best sailing dangerously close to the wind in a previous property/tax “misunderstanding”.
That fact that she didn’t take this as a warning to be squeaky clean in future shows a level of chutzpah that would put Mesdames Pelosi and Clinton to shame.
“As soon as they’d been in office for a few months and the slightest scrutiny was applied,”
I remember reading about Starmer getting free tickets for stuff way before he won the 2024 election. I thought then – why isn’t this being made more of? The information was there, it wasn’t even being hidden. The fact that the media chose not to make anything of it until after the election is more revealing.
She previously dodged a major bullet when failing to pay CGT on selling her right-to-buy (but not principal residence) property but clearly learned nothing from the experience.
She believed she was untouchable and frankly that’s what I expected this time as well.
Where did she get the money to buy an £800,000 holiday flat on the south coast ?
Being a care worker and a minor union official must be pretty well paid.
I have two questions that don’t seem to be being asked:
1. A “flat” in Sussex costs nearly a million pounds? I mean WTF.
2. A “public servant” who was a single mom high school drop out, became a social worker, union representative then an MP and didn’t marry a billionaire, can afford to buy a million pound flat AS HER SECOND HOME. How the f**k does that work?
It seems lying while buying property is going to be the downfall of the left. Who knew?
Sorry, looks like @LeeMoore WAS asking one of the questions I said weren’t being asked!!
Her salary as Deputy PM was £161k before the useful parliamentary expenses and allowances.
A drop of nearly £70k will make her lifestyle consistently more problematic unless someone like Lord Alli steps in to tide her over.
Not to condone Ms. Rayner’s actions but doesn’t 70k tax on an 800k property sound a bit excessive?
@Xylourgos
Not to condone Ms. Rayner’s actions but doesn’t 70k tax on an 800k property sound a bit excessive?
Isn’t that lefties eating their own dog food?
Yes they, the Labour Party politicians, are hypocrites – but this is perhaps the LEAST bad thing about them.
Attacking other people for their “greed” whilst, at the same time, always seeking money and goods for themselves is hypocrisy – but, again this is the LEAST bad thing about them.
What is truly terrible about them is their ideas – their beliefs.
A totally corrupt person could be bribed to leave other people alone, but someone who really believes in Collectivism may take the bribes – but then will impose the Collectivism anyway.
The Conservative Party government was often, and QUITE CORRECTLY, condemned for not resisting the officials and “experts” (although such resistance is incredibly difficult to do successfully).
But the present Labour Party government agrees-with the officials and “experts”.
I think that most people still have not grasped just how bad the situation in the United Kingdom now is.
Monsters have us by the throat – they control all the institutions, and they control (are) the elected government.
Jim at 12:42 nails the Trust dealing issue, which is an important point that could helpfully be clarified to assuage any doubts.
From what I have read, the issue with the stamp duty was this:
If the politician had been buying a property (the flat in Hove) and did not own any other property, then the tax on the purchase (stamp duty) was £30,000. If the politician did own another property and was buying that flat, it was treated as a second home, making the stamp duty £70,000.
Because the politician was, when buying the flat, a trustee of the trust that owned 50% going up to 75% of the property that the child was living in, then in law the politician was an ‘owner’ of that property for stamp duty purposes and so the £70,000 stamp duty charge applied to the purchase of the flat. In English law, ‘trustees’ own the trust property, but can only use it for the purposes of the trust.
I’ve also read that had the politician waited a few weeks before buying the flat and for the child to turn 18, then the trust would have ended and the politician’s ‘ownership’ of that property would have then ceased, making the Stamp Duty £30,000 rather than £70,000.
So in a ‘for want of a nail’ moment, an entire political career stalls.
Who is ever going to raise it as an issue, though? There’s no duty of the Official Solicitor to oversee these sort of things, is there? Not the same thing, but I have POA for my mum’s finances, as she’s in a care home. They too is bound up with all sorts of conditions and restrictions yet I’ve never been asked to justify any decision I’ve taken.
@Fraser Orr
She has a disabled son and sued the hospital alleging negligent treatment during the birth (https://www.dailymail.co.uk/news/article-15063623/Angela-Rayner-brought-mess-making.html – picked at random, you can find a lot of similar)
She got several hundred grand I believe.
Whatever the rights and wrongs of the case, the money was put into a trust and it looks like she dipped into this for part of the deposit on the flat.
The misuse of the Trust seems to me to be the most serious item here. If you sell your own property into a Trust where you are a trustee at an exaggerated value, that is surely defrauding the trust? The “purchase price” reflected by the Trust’s latest purchase is way above the current market rate.
Indeed, as the beneficiary of the Trust is a minor and thus in his parents’ care, you could argue there was no need for the Trust to buy the property at all.
I agree that two points which stand out are that the price of the flat Rayner was buying was insane, and so was the amount of stamp duty. Having to pay £70,000 to buy an £800,000 property is obscene, but I am just an ordinary citizen, not the quondam deputy prime minister, so what do I know?
I do think that Rayner was rather thick about this. She escaped a capital gains tax charge over the sale of her first house by the skin of her teeth, now she ignored advice from her conveyancer that she needed specialist advice about trust law. So no sympathy from me. She only got anywhere in the Labour party by appearing to be a vulgar, ignorant, gobshite, but she lacked even the basic intelligence to realise that her every property transaction was going to be scutinised.
I also agree that she seems to have abused her son’s trust fund to get the money for the deposit on this flat. No class, no decency, no self-awareness.
JohnK – the taxes are obscene, but then the lady supports high taxation and has said so endlessly.
The prices are also obscene – for example almost a million Pounds for a flat in Hove. And Hove is not even a very nice place.
Monetary inflation has made prices absurd – people can no longer work out what should be the price of anything.
As we have all often said – this monetary and financial system is utterly mad, totally insane.
Julia M
‘Who is ever going to raise it as an issue, though?’
In England and Wales, His Majesty’s Attorney-General (not a Cabinet Minister but a political appointment by and for the Government) has (or certainly used to have) the power to act where a trust exists and there is no one able to bring a claim to protect the interests of the trust. The beneficiary of the trust could also bring a claim through a litigation friend (a responsible adult) if under 18 (adulthood) or otherwise unable to act in adulthood for breach of fiduciary duty if a trustee were to fail in their fiduciary duty to act in the best interests of the beneficiary of the trust.
Paul:
As you say, inflation of the money supply has made prices quite insane. I do not know if that was the plan, but it is certainly the outcome.
As for Rayner, I am saving my sympathy for someone who deserves it.
@Fraser Orr
She has a disabled son and sued the hospital alleging negligent treatment during the birth
So she is using the money set aside for her disabled child’s care and buying a holiday home with it?
That appears to be the case.
And yet, i submit that we should wonder why people think it best to invest in houses, rather than stocks, bonds, treasuries, or gold.
Because it is obviously this thinking that makes house prices obscene/insane.
There can be good reasons Snorri. In my case, I recognised very early in life that I’m a spendthrift. I don’t live a particularly flashy lifestyle, not much in the way of expensive clothes, phones, cars and the like, but booze, smokes, and restaurants add up. So for me buying a house early on was enforced saving. More liquid investments probably would have been literally pissed up against a wall.
There’s as much chance of this happening as there is of the mystery of Sir Kwier’s incendiary rent boys ever being cleared up!
@ Jim
I think the issue of whether she was abusing/misusing the funds from her son’s Trust is probably not worth concentrating on. I agree that it’s probably not the best use of the funds BUT it’s not frivolous lifestyle spending.
Looking at it in the cold light of day, she increased the Trust’s share of an existing asset that may well appreciate in future. You could argue that it’s not a great idea/the money could have been better spent elsewhere, but it’s pretty marginal.
Most importantly I think that focussing on this particular issue distracts from the other real issues that you (and others) have described.
“I think the issue of whether she was abusing/misusing the funds from her son’s Trust is probably not worth concentrating on. I agree that it’s probably not the best use of the funds BUT it’s not frivolous lifestyle spending.”
If she has manipulated the house valuation to increase the amount of cash she got for the 25% share then she has defrauded the trust. Thats not frivolous spending. Thats theft, and people have been jailed for similar offences.
https://www.bbc.co.uk/news/articles/c780r74m9m2o
We’re all arguing this as if the question should be, was Ms. Raynor’s conduct bad enough to warrant the treatment she’s getting.
I’d like to think that our pols ought to be held to a higher standard.
Justice Cardozo (USSC), in an old case, described the standard of honesty a fiduciary ought to meet:
. . . and I’d like to think that a government official ought to be held to the same level of honesty as someone undertaking a fiduciary responsibility.
Of course, I’d also like to think that unicorns exist, because it would make the world prettier . . .
@ Jim
Yes I totally agree r.e. manipulating the house price. This is different.
I was specifically referring to the fact that some people feel she has misappropriated funds from her son’s trust fund to buy an asset which will probably benefit him in some way so it isn’t really an issue. Or not one to focus on anyway.
However if she has manipulated the house price which has resulted in the trust being penalised then of course it is relevant.
Mr Ed – the Attorney General, Lord Hermer, is a despicable person.
John K. – yes indeed Sir.
. . . and I’d like to think that a government official ought to be held to the same level of honesty as someone undertaking a fiduciary responsibility.
I think the movie version of Thomas More lived up to that. Otherwise I think you’re in for a long wait.
The last American President who was really careful about spending the money of the taxpayers was Calvin Coolidge – and it is interesting that this Classical Liberal President, like the Classical Liberal President Warren Harding (who was NOT corrupt) was not called a liberal in the 1920s.
The word “liberal” had already been stolen by Collectivists – even supporters of the Soviet Union, the worst tyranny on Earth in the 1920s, started to call themselves “liberals”. This is why it is utterly terrible that James Lindsay and others refuse to define what they mean by the word “liberal” – till they do define-their-terms they remain essentially without an intellectual position – refusing to define your position clearly is not financial corruption, but it is intellectual corruption. Sorry but you can not be a follower of Calvin Coolidge and a follower of Franklin Roosevelt – their philosophies of government were opposed, they were OPPOSITE directions – making government smaller and making government bigger, they can not both be liberals.
As for Britain – such Prime Ministers as Margaret Thatcher were not really in full control of government, it had grown too big for them to really be in control of it.
The last Prime Minster to actually have control of government spending, to really be responsible with the money of the taxpayers, may have been Gladstone – but even he, as his friend and biographer John Morley sadly explained, was not in total control – and did not achieve his ambition of abolishing income tax, which had been brought back in the 1840s by Sir Robert Peel (the claim, made in many history books, that income tax was introduced in the Napoleonic Wars and-has-been-with-us-ever-since – is a lie), indeed in the 1890s Gladstone was forced to watch as income tax was increased and made “Progressive” – by the swine Sir William Harcourt.
Under President Grant (1869-1877) the Civil War Income Tax was abolished and gold money restored – the evils of the Income Tax and new government paper money did not return till 1913.
In Britain the Napoleonic Wars Income Tax had been abolished udner Prime Minister Lord Liverpool and gold money restored – although, sadly, Bank of England notes and the Bank of England itself were not abolished.
Those who think that this does not matter as long there is a “promise to pay” (gold) on the notes, are sadly mistaken.
Bank “deposits” that are not really deposits (as in the deposits of grain to a grain silo), that are really Credit Expansion (“money” that never existed before book keeping tricks) are also a terrible evil – utterly corrupt.
They corrupt (twist and distort) both the economy and society.
To vote for Franklin Roosevelt in 1936 was to vote for the endless corruption of such things as the Works Projects Administration (WPA) – but it was also to vote for much more than this.
To vote for Franklin Roosevelt in 1936 (as 60% of voters did – terrified by the Depression, and, even then, indoctrinated by the Collectivist, state worshiping, education system and media) was to vote for the top rate of Income Tax to be over 70% (with lots of corrupt loopholes if you were a friend of the powerful – just as politically connected banks had been bailed out, but banks that were not friends of the powerful had not been bailed out) – only a couple of decades before it had been ZERO – O% before 1913.
And to vote for Franklin Roosevelt in 1936 was to endorse the stealing of all monetary gold by the threat of government violence (people were allowed to keep such things as wedding rings) and for the violation of all contracts – public and private.
Then there is government backed “Collective Bargaining” – i.e. mass UNEMPLOYMENT (also backed under President Hoover – who demanded that employers keep UP wages in a time of a Credit Money bust – there had been many Credit Money busts in American history from 1819 to 1921 – but his was the first time that a President had demanded that wages be kept UP – thus ensuring mass UNEMPLOYMENT for year after year).
And the Federal Government (unconstitutionally) placing itself – not individuals, families, mutual aid societies and fraternities, not even State and local governments, in charge of old age provision (from 1935 onwards).
If all the above is liberalism, if all this is honest government, then I am Alfred the Great.
Bobby:
It has been perhaps a decade since i linked on Samizdata to a blog post by a Frenchwoman, lamenting that, while in the Nordic countries the ruling class is held to a higher standard, in France the ruling class is held to a lower standard than people like you and me.
I most certainly hope that, by the end of 2028, the US of A will become more Nordic and less French 🙂
This is not important only for US residents.