Police drop investigation into Angela Rayner council house sale

Greater Manchester Police have dropped their investigation into the sale of Angela Rayner’s council house in Vicarage Road, Stockport. The house was purchased in 2007 under the Right-To-Buy scheme, with a discount of 25% off the purchase price offered as part of the scheme. She subsequently sold the property in 2015 for a gain of £48,500. She has claimed throughout that no Capital Gains Tax was payable on sale of the property, as it was her main residence throughout her period of ownership.

The reason the investigation has been dropped by the police, is because matters related to tax evasion are not considered under their jurisdiction, but are a matter for HMRC. Greater Manchester Police have passed their findings onto HMRC and to Stockport Council, who each must now decide whether to take any further action.

The left are presenting this as a conclusion to the matter, a demonstration that Ms. Rayner is innocent of any wrongdoing, and is simply the victim of a vicious smear campaign by the Tories, who (apparently) fear her because she is a working class woman.

However, the matter is far from concluded. The police have rightly stepped away from proceedings, because it is not a matter that falls under their remit to deal with. Quite why they have taken until now to say so is a mystery… they could have said on day one that this was not a police matter and left it to her accusers to refer it directly to HMRC there and then. However, there is almost certainly still a case to answer, and with HMRC now having been presented with evidence collected by Greater Manchester police to support any investigation, they must ensure that any wrongdoing is investigated and prosecuted.

Ms. Rayner has stated throughout that she has received expert tax advice that proves she is innocent of any wrongdoing. She has to date, however, refused to share that advice publicly, or even with her own leader. Even if she did, it would not prove her innocence.

The problem with relying on “expert advice”, is that the advice you receive is only as good as the information that informs it. If for example, she has told her tax advisers that she lived in the property for the full duration of her ownership, then they will have advised her that she is not liable to pay any Capital Gains Tax. The fact that this information may be inaccurate is not factored in.

Professional services firms such as accountants and tax advisors make it very clear at the point of engagement that their advice is based solely on the representations made to them, and they accept no responsibility for the accuracy of the information that they are provided with. We cannot be sure that the information that Ms. Rayner provided was complete or truthful, and if there were any errors or omissions in that information then the advice she received may be completely different to that provided if based on wholly honest and truthful representations.

As such, the accuracy of any advice that she can point to is only equivalent to the information that she has provided in its formulation. Or to put it another way… put shit in, get shit out. Her advice is therefore meaningless unless based on substantive third party evidence, which I strongly suspect it is not.

So back to the primary issues then, which have centred around three things:

1. Possible electoral roll fraud, because Ms. Rayner was registered to vote at her Vicarage Road address, when she may in fact have been living with her husband at his property in Lowndes Lane;

2. Possible tax fraud by virtue of non-declaration and payment of Capital Gains Tax due on sale of her property, as it may not have been her principle primary residence for a portion of the time that she owned it; and

3. Possible evasion of penalties pertaining to repayment of the Right-To-Buy discount of 25% that she received off the value of the Vicarage Road property when purchased in 2007.

For me, the first issue (the accusation of electoral roll fraud) is something of a non-starter. Both her Vicarage Road property, and the house that she was actually living in with her husband and children in Lowndes Lane, are within the same constituency. Therefore, no clear advantage would have been gained by being registered at an address she was not actually living at.

By far the more serious issues, both of which constitute matters warranting resignation if found guilty in my opinion, are points 2 and 3: the accusations that she deliberately evaded payment of Capital Gains Tax on sale of the property; and that she pretended to be living in the property beyond 2010 in order to avoid having to repay a portion of the 25% Right-To-Buy discount that she enjoyed when purchasing the property.

The rules of the Right-To-Buy scheme state that you must continue to live in your purchased council property for a minimum of 5 years after buying it. For each completed year that you stay in the property, the penalty for early sale reduces by 20%. So, if you sold a property that you had purchased under the Right-To-Buy scheme after 1 year, you would have to repay 80% of the discount that you enjoyed. If after 2 years, you would repay 60% etc. until after 5 years you are free to sell your property without penalty.

Rayner purchased her Vicarage Road property in 2007, but by 2009 had had a child with her then partner, Mark Rayner, who was living in a property 1 mile away in Lowndes Lane. In 2010 she married Mark Rayner. If at that point she was already living in the Lowndes Lane property with her husband and their children, that would mean she had only lived in her Vicarage Road property for a maximum of 3 years (or as little as 2 years) post-purchase.

As such, on sale of the property she would have been required to repay 40%-60% of the discount that she received. She purchased the property for £79,000, meaning that she received a discount equivalent to approximately £26,000. If she moved out after the 3-year anniversary of the purchase, she would have been expected to repay 40% x £26,000 = £10,400. If it was prior to the 3-year anniversary, she would have had to repay 60% of the discount, which would equate to £15,600.

So this, for me, represents the real reason why Rayner lied about her living arrangements. In my opinion, shared by many, she was actively trying to avoid having to make a sizeable repayment of the Right-To-Buy discount that she received. Her neighbours at Vicarage Road have publicly stated that she did not live there during the period in question. Her brother was living there as a lodger whilst she resided in the Lowndes Lane property with her husband and their children.

The fact that Ms. Rayner thinks anyone would be stupid enough to believe that she lived apart from her own children and her husband for 5 years between their marriage in 2010 and her sale of the Vicarage Road property in 2015, is testament to the disregard in which she holds the Great British public.

The evidence regarding her living arrangements that has been collated by Greater Manchester police has been shared with Stockport council, who will determine whether Rayner did indeed lie in order to avoid paying back her Right-To-Buy discount. That same evidence has also been shared with HMRC, who will determine whether a case should be brought against her on the same basis for deliberate evasion of a Capital Gains Tax liability on sale of the property.

In both instances, I fully expect the left-wing media to attempt to brush the issue under the carpet, at least until after the General Election. I also suspect that the HMRC enquiry will take some months to get started, given the lack of resources and backlog that the institute has been working against for the past few years. One thing is for sure though… anyone who believes that the matter has ended just because the police have stepped back from investigating it may have a surprise coming down the line.