Ex-deputy Prime Minister and Housing Secretary Angela Rayner’s resignation over incorrect stamp duty showcases the “blurred line” between legal and tax advice, which can be a “common challenge” in property transactions.
Rayner announced that she would resign earlier today following news that broke earlier this week that she had underpaid stamp duty on her Hove flat by as much as £40,000.
Jemma Hotta, partner at Oury Clark Solicitors, said: “In many cases, as appears to have happened here, solicitors will estimate the stamp duty due and prepare the return, but will caveat their involvement by stating that this does not constitute tax advice.
“They may recommend seeking specialist tax advice if the situation is complex; however, many purchasers understandably rely on their solicitor’s guidance and don’t seek separate input from a tax adviser.”
However, she said complexity increases significantly when trusts are involved, adding that the government’s stamp duty calculator was “useful” but “doesn’t account for scenarios such as a minor child having a beneficial interest in a property held in trust – something that could affect whether the 5% surcharge applies”.
“Most people would not naturally consider that they ‘own’ another property in such a situation, and unless the right questions are asked, it’s easy to see how this could be missed,” Hotta added.
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She continued on to say that stamp duty has become “increasingly complicated over the years”, adding: “Except in the most straightforward cases, specialist tax advice is often necessary. However, most purchasers assume their solicitor will handle stamp duty and are reluctant to incur additional costs for separate tax advice. Angela Rayner’s case underscores the importance of clarifying at the outset whether a solicitor is providing stamp duty advice, and if not, ensuring that a tax adviser is brought in at an early stage to work alongside them.”
Financial solutions can meet stamp duty challenge but consumer understanding is key
Fergus Allen, head of bridging at Clifton Private Finance, said cases like Rayner’s show the “real challenge many buyers face when it comes to affording the additional cost of property purchases, particularly stamp duty”.
He said: “There are financial solutions available to help buyers cover these costs, but attempting to avoid the rules around the rules can create bigger problems in the long run. For those concerned about how to pay stamp duty on top of the purchase price, there are practical options. One route is to add the stamp duty liability to your mortgage, spreading the cost rather than paying it upfront.
“However, this approach means paying interest on that amount over the full mortgage term, which can significantly increase total repayment costs. It also affects your loan-to-value (LTV) ratio, potentially pushing you into a higher-risk band and triggering less favourable rates.
“In some cases, a bridging loan can be an effective way to finance a property purchase while arranging longer-term funding. These loans typically cover the full purchase price rather than just the stamp duty.”
Allen said this is why adding stamp duty to the mortgage can be a “smart move”, as it “ensures the cost is accounted for within your long-term finance, while a bridging loan can support the immediate purchase.”
He noted that bridging can be “particularly useful” if you need to “move quickly or are waiting on the sale of another property”.
“While interest rates are typically higher than standard mortgages and terms are shorter, when used strategically, bridging can ensure transactions progress smoothly and affordability pressures are managed,” Allen said.
He added that factoring in council tax implications of owning a second home were vital, as local councils were increasingly imposing premiums to dissuade homeownership.
“These range from 100% premiums, effectively doubling the council tax, in parts of Scotland to rates as high as 150% in Pembrokeshire, Wales. Buyers need to factor these costs into their budgets alongside stamp duty.
“Second-home income tax and the stamp duty surcharge must also be considered. First introduced in 2016 and raised again by Chancellor Rachel Reeves in October 2024, the surcharge is designed to prevent tax avoidance among wealthier buyers and to redirect revenue back to the Treasury. With second-home ownership under increasing scrutiny, it’s unlikely that any attempt to sidestep the rules will go unnoticed,” he added.
Allen said the “key takeaway” is that there are “legitimate, transparent tools available to help buyers manage affordability”, such as mortgages and bridging loans, but buyers have to “understand their implications before proceeding”.
“Ultimately, planning ahead, securing the right finance, and being fully transparent with local authorities is the most responsible approach,” he said.