HM Revenue and Customs has confirmed that Angela Rayner owes no capital gains tax for the sale of her former council house and that no further action will be taken, according to a document seen by the Guardian. The tax authority said two weeks ago it had considered the evidence and had concluded the house in Stockport was the Labour deputy leader’s principal residence the whole time she owned it, meaning no tax would be due. Greater Manchester police said on Tuesday that Rayner had been cleared of wrongdoing over claims she wrongly declared her permanent address on the electoral register, which would have been a criminal offence. The force said it was taking no further action but that because matters involving personal tax or council tax did not fall under its jurisdiction it had shared information from its six-week investigation with HMRC and Stockport council. A spokesperson for the council said it had “reviewed and responded to all correspondence” on the matter, adding: “We have also concluded that no further action will be taken on behalf of the council.” HMRC has refused to confirm or deny whether it was investigating Rayner’s case as it does not comment on individual cases because of taxpayer confidentiality. The Conservative party, which first urged police to investigate, had said it was up to Rayner to “clear this up” by publishing the tax advice she had received. However, the HMRC document seen by the Guardian found “no capital gains tax is due” on the sale of Rayner’s former home at 80 Vicarage Road. It added that after “considering the information” provided by the MP and her ex-husband, Mark, it agreed the home had been her principal residence. The tax body suggested the case was now concluded. Rayner’s allies had been confident she would be cleared, suggesting that her legal and financial documents – which could include utility bills, payslips and bank account details – clearly showed her own home was her primary residence. Rayner had said she would resign as deputy leader if she was found to have broken the law by avoiding tax when she sold the home for a profit in 2015. The Conservatives had put pressure on police to look into claims that she had wrongly designated the home as her principal residence, and that it was wrongly listed on the electoral register. GMP initially said there was no case to answer but launched an investigation after the story was relentlessly pursued by the rightwing press. At the time, Rayner pleaded for privacy and said there was “never a question of deceitfulness” or “conspiracy” over her living arrangements, but that she had had a “difficult” family situation. In 2007, before Rayner was an MP, she bought the £79,000 property using the right-to-buy scheme, getting a 25% discount on the property’s asking price. A year later she had a child with her then partner, Mark. He owned a home about a mile away. Their son was born prematurely and spent eight months in intensive care. The couple kept their separate properties during this period. In 2010, they got married, a year after having their second child. In March 2015, Rayner sold her home for £127,500, making a profit of £48,500. Because it was designated as her main residence, the profit was not liable for capital gains tax.
The allegation by some Tories was that this was misleading, as she primarily lived at her then husband’s address, while some neighbours had suggested that her brother had also been living at Vicarage Road. Married couples who have individual properties can have only one main residence between them under tax law. After the police announcement, Rayner said: “We have seen the Conservative party use this playbook before – reporting political opponents to the police during election campaigns to distract from their dire record. I am grateful to all those who have stood by and supported me and my family.” Keir Starmer said he was “obviously pleased”, adding: “I never doubted that Angela hadn’t done anything wrong.” The Labour leader was subject to a police investigation, also heavily pushed by Conservative MPs, by Durham police in 2022 but was cleared over claims he and Rayner had broken lockdown rules by having beer and a takeaway curry with Labour staff the year before.