Angela Rayner, UK Deputy Prime Minister, Resigns After Underpaying Tax

Europe|Angela Rayner, U.K. Deputy Premier, Resigns After Underpaying Tax

Britain’s embattled prime minister, Keir Starmer, suffered another stinging setback on Friday, as his deputy prime minister, Angela Rayner, resigned after admitting that she had failed to pay adequate taxes on the purchase of a seaside apartment.

Ms. Rayner, a popular figure on the left wing of the Labour Party, stepped down after an independent ethics adviser concluded that she had breached the code of conduct for cabinet ministers in underpaying the tax, which was part of a complex transaction involving another house that she owned with her ex-husband.

In addition to being deputy prime minister, she had responsibility for housing issues.

Ms. Rayner’s resignation deepens a sense of the disarray around Mr. Starmer’s government, which has struggled with a stagnant economy, lurching economic policies, and a resurgent populist right. The Labour Party now lags an anti-immigration party, Reform U.K., by nearly double digits in opinion polls.

While her resignation puts a quick end to a highly personal drama that had transfixed British political circles for two weeks, it will cost Mr. Starmer a powerful ally, who served as a bridge to Labour’s restive left. .

Her meteoric political rise has been cut short by a tangled chain of events that began last May, after she bought an apartment in Hove, on England’s southeast coast, as a vacation home. On Wednesday, she said in a statement that she had contacted the tax authorities to notify them that she owed additional “stamp duty,” a tax paid in England by the buyer of a residential property above a certain price.

Ms. Rayner insisted that the underpayment was an innocent mistake, a result of complex arrangements involving a financial trust that she established for her disabled son in 2020, and another house near Manchester, which she had owned with her ex-husband and where she still lives some of the time.

Ms. Rayner said that she and her ex-husband, whom she divorced in 2023, alternated living in the house, where they cared for their son. The trust was designed to secure part-ownership of the house for the child.

After British newspapers raised questions about her tax payments, she consulted a prominent lawyer, who concluded that this arrangement did not shield her from paying a higher tax rate for the apartment, since it qualified as a second home.

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