A tax expert has given his verdict on whether Angela Rayner paid the correct amount of Capital Gains on the sale of her house, calling for the Labour Party deputy leader to clarify her position but also suggesting that the Daily Mail’s central charge could be irrelevant.
The right-leaning newspaper has gone to town on Rayner over the past few weeks after a new book by Michael Ashcroft titled the ‘Red Queen?’ raised questions over her tax affairs.
This weekend, the Mail On Sunday claimed to have fresh evidence the Labour deputy leader did not correctly outline her tax arrangements.
It pointed to social media posts in which she referred to her husband’s house as “home”, while maintaining her council house was her principle residence.
The newspaper has previously questioned whether she paid enough tax on the 2015 sale of her Stockport home, as it suggested this was not her primary address.
But according to tax expert Dan Neidle, the newspaper’s central charge that Rayner didn’t live at her property is irrelevant.
According to his analysis, Rayner could have fallen fowl to a particularly complicated area of tax law, meaning she could be liable for a Capital Gains Tax payment of up to £3,500, but potentially less or zero.
She has said that, “as with the majority of ordinary people who sell their own homes, I was not liable for capital gains tax because it was my home and the only one I owned.”
But as Neidle points out, this “isn’t how the rules work”.
Married couples can only have one principal residence for CGT purposes. A married couple who own more than one home are free to choose which is their “principal residence” for CGT purposes by sending a nomination to HMRC within two years of the situation arising.
It’s a complicated area of the law, and “it’s therefore hard to blame Ms Rayner for misunderstanding the rules”, Neidle says.
As such, it’s important to remember that accidentally paying the wrong amount of tax is not a crime.
It’s not a crime even if you’re careless or negligent. Ignorance is a defence to the crime of tax evasion.
“Calls for prosecutions for tax evasion were silly when we were talking about Nadhim Zahawi; they’re plain daft when we’re talking about Angela Rayner”, Neidle notes.
However, everyone still has a duty to pay the correct amount of tax, and ignorance is no defence to having to pay it.
As Alistair King points out below, there is no suggestion Rayner is not cooperating with HMRC, rendering the Mail’s smear campaign as completely irrelevant
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