Angela Rayner's SDLT case: lessons for trustees

Insight

09.10.2025

The recent resignation of former Deputy Prime Minister, Angela Rayner, over a £40,000 underpayment of Stamp Duty Land Tax (SDLT) on the purchase of an £800,000 flat in Hove has sparked public interest in the complexities surrounding trusts, beneficial ownership, and their potential (and, sometimes, unintended) tax consequences.

While the headlines have mostly focused on the tax angle, trust practitioners may have been interested in other aspects of the transaction. With some reports suggesting that Ms Rayner may have been one of the trustees of the trust set up for her disabled son's benefit, which purchased Ms Rayner's share in the home from her, Rayner's case is a reminder of some of the fundamental principles for both professional and lay trustees when dealing with trust assets.

Trustee Duties

Trustees must act in accordance with their fiduciary duties, such that when they make decisions relating to the trust and its assets they must always ensure they are:

acting in the interests of the beneficiaries as a whole;
acting openly, honestly, and in good faith;
not putting themselves in a position where their personal interests conflict with their fiduciary duties as a trustee; and
not making a profit from their fiduciary office.

Conflicts of interest and the Rule Against Self-Dealing

Trustees must be careful to avoid any conflict between their personal interests and their fiduciary duties to the beneficiaries of the trust. In particular, they should be mindful of the rule against self-dealing, a fundamental principle of trust law. This rule prohibits trustees from entering into transactions with the trust in a personal capacity, regardless of whether the transaction is fair or beneficial to the trust, unless the terms of the trust contain specific provisions that permit such conduct or the court's approval was sought. If Ms Rayner were the trustee of her son's trust (which we do not know, but which has been reported), the purchase by the trust of her 25% share of the property could expose the transaction to legal challenge. This is a strict test – even if the transaction was motivated, as no doubt it was, to secure the son's interest in the property and with his best interests clearly at heart, the inherent conflict could put the transaction at risk.

Trustee investment powers

From the moment a trustee takes office, they are subject to an ongoing duty to safeguard the trust fund, typically by ensuring that the fund's assets are invested properly.

Subject to any express provisions in the trust instrument, s3 of the Trustee Act 2000 confers a wide general power of investment on trustees to make 'any kind of investment that he could make if he were absolutely entitled to the assets of the trust'. When exercising a power of investment (whether statutory or express) trustees must have regard to the 'standard investment criteria'. This includes (i) the suitability of the investment to the trust and (ii) the need for diversification of investments (so as is appropriate to the trust's specific circumstances) in order to mitigate risk.

A power to invest in the purchase of land carries additional obligations for trustees. When exercising such a power, the trustees must (i) take steps to ascertain the value of the property and ensure they do not purchase it at an excessive price; (ii) ensure the trust obtains the legal estate with good title and avoid any purchase terms that would prevent this; (iii) avoid buying property that unfairly benefits or disadvantages one beneficiary over another and (iv) avoid buying property speculatively unless the trust already has the money available to pay for it.

In addition to taking into account the standard investment criteria, trustees must usually obtain expert advice before making or changing any investments. This advice must come from someone the trustee reasonably believes is qualified to do so through their knowledge and experience. However, trustees can choose not to seek advice if they reasonably conclude it would be unnecessary or inappropriate in the circumstances.

Conclusion

Angela Rayner’s SDLT controversy provides important reminders for lay and professional trustees alike. It underscores the importance of understanding the full legal and tax implications of trust arrangements, especially where complex family dynamics and financial interests intersect. Trustees must remain vigilant in adhering to their fiduciary duties, avoiding conflicts of interest, and seeking specialist advice when necessary.

The case also highlights the need for greater clarity in tax legislation, particularly around the treatment of trusts involving minor or otherwise vulnerable beneficiaries. Until then, trustees must navigate these complexities with care, or else risk significant legal, financial, and even reputational consequences.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.