Angela Rayner tax fail

[Iwishicouldflyhigh]

But it’s ok because she was just badly advised.
I’ll remember that excuse next time I fill in my tax return.

But still confused about one can have 2 main homes?

ISAs and pension savings are not loopholes! The tax position is clearly government policy! They are not avoiding tax any more than not paying vat on most food is avoiding tax. It’s taxation policy which is entirely different. When tax is calculated on property, the personal situation of the purchaser and seller is what matters within a framework of taxation policy. AR took advice from others to get round taxation policy. There was no loophole! She owes the tax. It’s actually straightforward.

And rightly so. She needs to be gone
How can anyone respect a deputy PM that cheats the system she enforces

You missed an important bit. AR sold her 25% stake in the Ashton property to her son's trust fund ... for £162,500. She then used that money to pay a deposit on the Hove place.
She is a trustee. Was this purchase/sale in her son's best interests? If it wasn't, then tax fraud is the very least of her worries.

Is there any evidence to support the claim she took advice? I know she has said she did, but the two firms linked to her have put out clear statements that they did not advise her. She references having raised it with two ‘trust specialists’ , but that’s unsubstantiated as yet?

The use of any tax planning tools to reduce one’s exposure to tax is avoiding tax. That includes pensions, ISAs, corporate wrappers, trusts or any other such tool. Tax avoidance is perfectly legal. When Labour don’t like it they call it ‘loopholes’ It’s just perfectly legitimate tax avoidance through the use of tax planning.

The illegal bit is tax evasion. That’s where you deliberately do sometime to conceal what the true tax due is. Deliberately saying that you don’t own another property when you do to save the 5% SDLT uplift on second homes is tax evasion.

The question is did Rayner deliberately tell the conveyancer this was her only property, or was it a ‘mistake’. From an HMRC perspective they will expect her to have taken reasonable care in her tax affairs. Taking no advice at all could well mean that even if it was an error then they will see it as evasion. As a reasonable person would have taken advice. So, it’s critical to her case that the two ‘trust specialists’ she references can be identified, and the basis under which they were engaged made clear.

Even then, depending on the nature of a ‘trust specialist’ HMRC could take the view that she should have consulted a SDLT specialist anyway because of the background and complexity. And if the ‘trust specialists’ she consulted end up being just a couple of lawyers she had a chat with, and no formal engagement took place, then again HMRC could, take the view she didn’t take reasonable care.

The reality is given who she is, the apparent complexity of the case and the potential reputational damage to any firm, only big firms would take this on as a formal engagement, and I suspect the fee for the work would be well north of the £1,800 or so she paid the conveyancer. I wouldn’t be at all surprised if it wasn’t in the £10k to £20k range. Probably the top end. It’s not as if Rayner is a long term lucrative fee earner for them - just a risk. As Shoosmiths have found out. Though she wasn’t deputy PM when they did do work for her.

Maybe she started a thread in Legal, Property or AIBU?.
The advice she got was from MNer @PropertyTaxExpert .

Taking counsels (barristers) advice is a diversion that makes this seem more complicated than it is. It is really quite basic that if any of your minor children are the beneficiaries of a trust set up by parents then that trust property is treated as the adults property. It would take a trainee solicitor 5 minutes to find this out, had they been given the facts. You can also find this out from a quick google at HMRC.

@Tryingtokeepgoing A government making it clear there are savings products and pensions which are advantageous to people because of the tax they have decided not to levy, is, at a stretch “avoiding tax”. Many of us had no option when pension deductions were made! Most people see “avoidance” as paying yourself in dividends which attract a lower tax rate than income tax on earnings. It’s just about legal but questionable.

I understand she’s said she took advice. No doubt the report will seek to clarify this. However trust advice is usually taken from trust specialists but they do advise on tax - if they are asked! Were they asked?

Well said 👏👏👏

Why is it questionable to use dividends instead of income to manage your tax liability, but not ISAs or pensions? Both are perfectly legal ways of structuring one’s finances to avoid paying more tax than necessary. There’s no ‘just about legal’ about it.

If the government didn’t intend people to do it they’d change the rules. As indeed the previous one did with IR35. But if they change the rules too much what’s the incentive to risk one’s own capital and set up a business? IR35 was meant to have dealt with the edge cases. Though has just led to more economically inactive people as far as I can see :)

Even more do as her share was only worth approx £80k

😂

There was no advice though either.conveyancing solicitors were obviously told she didn’t already have a home. Which turns out to be not fully true - otherwise many adults could put the house in the kids name, still live there and do the same (avoid the stamp duty). Why use a tiny conveyancing firm / why not get actual advice on that unusual trust set up. Annoying it’s so silly. But disingenuous to ‘blame the lawyer’.

I think this is a really serious part. If the property was overvalued (by who) then she will have defrauded the trust. A trust that contained her son's compensation not a trust that was there to be used as a money pot to ensure she had enough for a deposit.

Politicians seem to excuse themselves from responsibility for most of their dodgy actions these days (Lord Ali and his freebies buying political influence for example). Moral standards which were already low have slipped considerably under Keir Starmer's rabble of dodgy incompetents. So the fact she didn't resign or hasnt been sacked is not really a surprise. It's just irritating to have to listen to this pompous sanctimonious Prime Minister pretending he is running an honourable, successful and decent government. The last PMQs a case in point. His sneering tone was hard to listen to.

I take more issue with the morality of a Labour politician blocking so many houses from the housing market. Their setup of leaving the kids in one house whilst mum & dad swap in requires 3 homes. Imagine if every divorced family up and down the country did that: one property for mum, one for dad, and one for the kids. You think we have a housing shortage now?!?! It’s greedy to block 3 homes from the housing market. Having a third property for your kids is the ultimate in “we’re not one of you”. SMH

I stopped listening to PMQs a while ago, his sneering bullying is revolting. The Labour sanctimony when Rayner is up against it for lying won’t wash either.

Agreed. I only watched it to see the action re Raynor. But Kemi Bademoch was hopeless so it was a bit of a non event. And as usual, Keir S sounded like a Dalek with a cold (as someone in thr Spectator put it)

Honestly I’d be keen to see Farage’s taxes

I can’t comment on KB as didn’t listen but I do wonder if Reeves crying at a previous one was a bit of a changer. Obviously the same blamed KB as usual for that, when really these are all Labour’s problems.

Do you mean because Kemi B was seen to be a bit harsh to Rachel Reeves when she was crying (although I think Kemi was just bewildered and didn't realise what was happening) that she backed off going for another woman who might cry?.Goddammit. If she did, that's decades of women fighting to be equal in the work place chucked away.

Nesting arrangements are becoming more and more common. What usually happens is that two properties are involved with the parents alternating between them while the kids stay put. The effect is just the same as if the parents each have their own home and the kids alternate. In this case the family home has been adapted for the needs of the disabled child.

MPs whose constituencies aren’t commutable from London have had two homes for decades.

I’ve long said that the rise in divorce/single parenting has contributed significantly to the housing shortage - one family living in (usually!) two properties instead of one is just basic maths. Not said as a judgement, just figures.

Maybe although I didn’t watch. KB gets it no matter what from some so there’s that, I agree with you she was just doing what she’s meant to. It was KS with the bullying ‘she won’t be’ in answer to will she have her job that was worse.

That …and owners buying their council
houses and the gov not building any more.

Not really. Many nesting families refuse to share the non-kid house because a) they hate each other and b) don’t want to share a space (even if not there together), and absolutely occupy 3 separate properties.

And increase in benefits bill too as single parents are more likely to be benefit claimants than a traditional two person household with only one lot of housing costs.