Concerning questions of trust law
The mystery surrounding Mrs Rayner’s property transactions, which have returned to the front pages of the newspapers, is not only as to their fiscal effects. They also raise concerning questions of trust law, the answers to which remain mysterious.
Of course we must be careful to be fair. We only have press reports of her transactions, principally in the Telegraph and the Guardian. We summarise below what seem to be the relevant facts from those reports. The Telegraph, in particular, is, in our experience, the most reliable British paper in reporting legal and fiscal matters but it is not always completely accurate and it may be that there are some inaccuracies in the facts as we summarise them below which will resolve the trust law conundrums which we identify.
The relevant facts?
Charlie’s birth and handicaps
Mrs Rayner (née Bowen) has three children. One of those children, Charlie, fathered by Mark Rayner, was born, prematurely at 23 weeks, in April 2008. There were difficulties at his birth and thereafter with the result that he is registered as blind and has special educational needs. It seems that the NHS was negligent in some aspects of his care because, as we shall see, it later paid compensation in respect of him.
Mrs Rayner’s Marriage
In September 2010, Miss Bowen, as she then was, married Mr Rayner.
Mrs Rayner becomes an MP
In 2015, Mrs Rayner became the MP for Ashton-under-Lyne and has continued to represent the constituency since then.
The purchase of the Ashton Property
In 2016 Mr and Mrs Rayner together bought a four-bedroomed detached property for £375,000 (the ‘Ashton Property’) and it appears that they lived in this property together with their two children and Mrs Rayner’s child by a previous relationship.
The Settlement of Charlie’s Trust
As is common in such matters, it took a long time to determine the compensation which the NHS would pay and it was not until 2020, that the compensation was paid by way of settlement on trust for Charlie (‘Charlie’s Trust’) under a Court Order. The amount settled is not publicly known but it must have been at least sufficient to allow the payment to Mrs Rayner which the Trustees made in 2025 (see below). The trustees (the ‘Trustees’) were Mr and Mrs Rayner and a trust company (‘Shoosmiths TrustCo’) which is a part of a group of entities and arrangements associated with Shoosmiths LLP (‘Shoosmiths’), a large firm of solicitors with offices in the UK and Brussels.
It is common practice when such financial compensation is settled on trusts, that the trust should be of a type falling within the provisions of Inheritance Tax Act 1984 (‘IHTA 1984’) s.89 and Finance Act (‘FA’) 2005 s.34. IHTA 1984 s.89, subject to certain exceptions, provides that the property settled should be held on trusts which secure that:
‘…
…, if any of the settled property or income arising from it is applied during the disabled person’s life for the benefit of a beneficiary, it is applied for the benefit of the disabled person.’
FA 2005 s.34, in a slightly different wording, is to the same effect.
The instrument creating and governing Charlie’s Trust has not been published so we do not know the terms of the trust.
Most professionals commenting upon the matter, however, have assumed that it is a disabled person’s trust within IHTA 1984 s.89 and FA 2005 s.34 and we make that assumption in this blog point.
Mr and Mrs Rayner’s divorce and the Ashton Property Additions
Mr and Mrs Rayner separated in 2020. In the summer of 2022, it was reported that Mrs Rayner was in a romantic relationship with an individual called Sam Tarry who was then also a Labour MP.
Mr and Mrs Rayner were divorced in 2023 when, it appears, the Ashton Property was valued for the purposes of the financial settlement on the divorce at £650,000. As part of that final settlement Mr and Mrs Rayner each settled (the ‘Ashton Property Additions’) one half of their interests in the Ashton Property (that is 25% interests in the whole) on Charlie’s Trust.
It seems that Mr and Mrs Rayner made what is referred to in the press as a ‘nesting agreement’ under which Charlie was to occupy the Ashton Property continuously and Mr and Mrs Rayner were to take it in turns to occupy it and to care for Charlie.
Mrs Rayner becomes Deputy Prime Minister
In July 2024, Mrs Rayner became the Secretary of State for Housing, Communities and Local Government and, at the same time, was granted the honorific title of Deputy Prime Minister. On her appointment as Deputy Prime Minister she was granted the use of a grace and favour apartment in Admiralty House, a right which she retained at least until her resignation in September 2025.
The Ashton Sale
Mr Tarry had a flat in Brighton and Mrs Rayner decided to purchase a sea-front flat in nearby Hove.
We have seen that after the financial settlement on her divorce, the Ashton Property was owned as tenants in common as to 50% by the Trustees, 25% by Mr Rayner absolutely and 25% by Mrs Rayner absolutely. It seems that in order to fund her purchase of a residence in Hove, in January 2025 Mrs Rayner sold (the ‘Ashton Sale’) her remaining 25% interest (the ‘Disposed Interest’) in the Ashton Property to the Trustees for £162,500. It seems that this sum was determined by taking one quarter of the value of the undivided freehold of the Ashton house which had been, according to the forms submitted to the Land Registry in 2023, £650,000.
There are a number of reasons for thinking that the consideration given by the Trustees for the Disposed Interest under the Ashton Sale may have been significantly in excess of its market value at the time of its sale in January 2025.
As we have seen, the price seems to have been based on the value of the unencumbered freehold of the building in 2023 when the Rayners made the Ashton Property Additions to Charlie’s Trust. It is not clear how that value was calculated, who performed the valuation or whether, whoever did so, did so as an expert. In any event, it is likely that there will have been some change in the value of the Ashton Property between the making of the Trust in 2023 and the Ashton Sale in January 2025.
In an article published in the Daily Telegraph on 4th September 2025 (‘Why is Angela Rayner’s house so much more expensive than her neighbours’?’) Madeleine Ross cited information about various comparative valuations which suggested that the property might have been overvalued both in 2023, at the time of the Ashton Property Additions, and in 2025, at the time of the Ashton Sale. She cites, for example, a Rightmove valuation valuing the house at £565,000. She points out that no house within a mile of the Ashton Property has sold for more than £561,000 and that there had been 44 sales of properties in the same street as the Ashton Property in the last five years and the highest amount of consideration paid in any of these sales was paid for a three-bedroomed semi-detached home which sold for £365,000 in 2021. She also cites a local estate agent who valued the property at between £527,000 and £620,000 and another property website which valued it at £637,000. The latter of these two valuations, however, is, arguably, near enough to the value put on the property in 2023 and 2025 to be within the normal margin of error for valuations.
More fundamentally, the values of the interests settled in 2023 and of the interest sold in 2025 seem to have been arrived at by simply pro-rating the value of an absolute interest in the whole freehold. In practice, no third-party buyer would offer an amount equal to one quarter of the freehold’s value for a 25% interest in the freehold of a property occupied by a disabled individual and his parents because of the difficulty, indeed the unlikelihood, of obtaining vacant possession of such a property. Any third-party buyer would discount the proportionate value of the whole by a very substantial percentage to reflect that risk.
It may be that the Trustees paid no more than the market price for the Disposed Interest when they acquired it in 2025 but, on the basis of the information that is publicly available, there is good reason to think that they may have paid substantially more than that value.
Mrs Rayner’s purchase of the Hove Flat
In May 2025, Mrs Rayner bought a flat on the seafront in Hove (the ‘Hove Acquisition’) paying £800,000 for it. It was in respect of this purchase that she made an incorrect return of the SDLT chargeable on the transaction and paid to HMRC £40,000 less than the actual chargeable amount.
She funded the Hove Acquisition with a mortgage of approximately £640,000 and the proceeds of the Ashton Sale of £162,500.
Mrs Rayner’s resignation
On 5th September 2025, after the Telegraph’s exposure of her having made an incorrect return and having failed to pay the full amount of SDLT chargeable on the Hove Acquisition which led to the decision of the Independent Adviser on Ministerial Standards that she had broken the Ministerial Code, Mrs Rayner resigned her ministerial position and her title as Deputy Prime Minister.
Disturbing questions of trust law
It is the Ashton Sale which raises disturbing questions of trust law both as to how it could have taken place at all and as to the value at which it took place.
Trustees’ duties
Trustees are, of course, subject to duties arising under case law and statute. In exercising their trusts, trustees are:
- to act in good faith;
- not to profit from the trust;
- to avoid conflict between their duty and their personal interests;
- not to act for their own benefit;
- deal fairly.
Trustees must not, therefore, make use of their position as trustees for their own interest or private advantage or intentionally place themselves in the position in which their interest may conflict with their duty.
The Trustee Act 2000 s.5 provides that:
‘(1) Before exercising any power of investment, whether arising under this Part or otherwise, a trustee must (unless the exception applies) obtain and consider proper advice about the way in which, having regard to the standard investment criteria, the power should be exercised.
(2) When reviewing the investments of the trust, a trustee must (unless the exception applies) obtain and consider proper advice about whether, having regard to the standard investment criteria, the investments should be varied.
(3) The exception is that a trustee need not obtain such advice if he reasonably concludes that in all the circumstances it is unnecessary or inappropriate to do so.
(4) Proper advice is the advice of a person who is reasonably believed by the trustee to be qualified to give it by his ability in and practical experience of financial and other matters relating to the proposed investment.
… ’.
There are some indications that in entering into the Ashton Sale the Trustees may have breached their duties as Trustees.
An unsuitable investment?
It does not seem that the acquisition of the Disposed Interest could be justified on investment grounds. The moneys which were paid for it must, before they were applied to the acquisition, have been invested in some way and must, one presumes, have been earning income which would have been available to meet Charlie’s needs. Once the trust moneys had been applied to purchasing the Disposed Interest, however, no income would arise because the property was not let. Any future yield on the investment in the Disposed Interest is entirely dependent upon the speculative hope of increases in the capital value of the property the Trustees’ share of which has been increased, by virtue of the Ashton Sale, from 50% to 75%.
It is also difficult to see what other benefits the transaction could have conferred on Charlie.
No increase in the benefit of occupation
The primary benefit he has in relation to the Ashton Property is being able to occupy it with his parents, each of his parents occupying it in turn under the ‘Nesting Arrangement’. It is difficult to see how that benefit is enlarged in any way by the enlargement of the Trust’s interest in the property from 50% to 75% at the expense of the reduction of his mother’s interest from 25% to nothing. No Court is likely to order a sale of the property or allow possession of it in a manner which is not in the interests of Charlie. In the unlikely event that it would do so, the Court decision is hardly likely to be influenced by whether the trust has a 50% interest or a 75% in the Ashton Property.
No wider benefit
Looking at the transaction more widely, one can see that Mrs Rayner might find it convenient to be enabled to purchase a residence near her lover but it is difficult to see how it could have been of benefit to her son to facilitate his mother having the use of a residence over 260 miles away from his home. One could hardly say that the transaction was of benefit to Charlie because it enabled his mother to pursue her occupation because her activities as an MP and Government Minister were, and are, primarily conducted in Westminster, where she had the use of a grace and favour apartment in Admiralty House, and in her constituency of Ashton-under-Lyne, where she had a right of occupation of the Ashton Property.
No possible benefit from paying more than market value
Even if there were some benefit to Charlie from this transaction, which, as we have said is not apparent from the information which has been published, it cannot have been of benefit to Charlie’s Trust for the Trustees to pay more for the Disposed Interest, if they did so, than its market value at the time they acquired it.
A need for further explanation
There must surely be explanations of these apparent breaches of trust for Shoosmiths are, no doubt, a competent and ethical organisation and one assumes the same must be true of any trust company which it owns. If the transactions had involved any breaches of trust, therefore, one would have expected Shoosmiths to have identified the breaches and, advised the Trustees against committing them and Shoosmiths TrustCo, acting as trustee, to have withheld its assent to the body of Trustees entering into the transactions.
There is, of course, only one way that the public can be reassured that the Trustees have not acted in breach of trust – by their publishing a detailed explanation of their actions.
In a statement reported in the Telegraph on 3rd September 2025, in which she admitted that she did not pay the full amount of SDLT chargeable on the Hove Acquisition, Mrs Rayner said:
‘I want to set out the facts as openly and transparently as I can.’
Without further explanation, her property transactions, far from being transparent, remain remarkably obscure. It is to be hoped that she, and her fellow trustees, will provide the necessary explanations.
