What is Stamp Duty? Does the tax that forced Angela Rayner to resign exist in Scotland - Land and Buildings Transaction Tax explained

It comes after an independent ethics advisor found she broke ministerial code, with Sir Laurie Magnus saying Rayner had “acted with integrity and with a dedicated and exemplary commitment to public service”, but concluding she breached the code over her tax affairs.

In her letter of resignation Rayner said she “deeply” regretted “her decision not to seek additional specialist tax advice given her position in the government and her complex personal situation” and added that she took “full responsibility for this error".

She added: "I would like to take this opportunity to repeat that it was never my intention to do anything other than pay the right amount."

The issue hinged on whether the £800,000 flat she bought in Hove could be considered her ‘main residence’ for Stamp Duty purposes, or if is was classified as a second home. She thought it was the former, but experts later informed her that it was the latter, meaning she had underpaid to the tune of £40,000.

Here’s everything you need to know about the tax - and what the position is in Scotland.

What is Stamp Duty?

Stamp Duty, or Stamp Duty Land Tax (SDLT) to give it it’s full name, is a tax payable on the purchase of a property in England and Northern Ireland (Scotland and Wales have their own systems). Stamp duty is a progressive tax, meaning the higher the property price, the more you’ll pay, according to a series of thresholds or bands.

How much Stamp Duty do you need to pay?

The current rates of Stamp Duty in England and Northern Ireland are as follows:

Up to £125,000: Zero

The next £125,000 (the portion from £125,001 to £250,000): 2%

The next £675,000 (the portion from £250,001 to £925,000): 5%

The next £575,000 (the portion from £925,001 to £1.5 million): 10%

The remaining amount (the portion above £1.5 million):12%

So, for example for a property worth £500,000, you’d pay nothing on the first £125,000, 2 per cent on the next £125,000 and 5 per cent on the next £250,000.

What about first time buyers and second home buyers?

If you are a first time buyer you don’t pay any Stamp Duty for the first £300,000 of the property value and 5 per cent on the next £200,000. If the property is worth more than £500,000 you are not eligible for relief and just pay the normal rates.

If you are buying a second home you need to pay an extra 5 per cent of the property value on top of the normal Stamp Duty. This is what Angela Rayner fell foul of.

Does Stamp Duty exist in Scotland?

Stamp Duty was scrapped in Scotland on April 1, 2015, and was replaced by a similar Land and Buildings Transaction Tax (LBTT). This is a fully devolved tax, with the Scottish Parliament setting the rates independently of Westminster. Changes to Stamp Duty rates no longer has any direct impact on Scots.

How much Land and Buildings Transaction Tax do you have to play in Scotland?

The amount of LBTT depends of the type of property you are buying - and the price of it. Here’s how it breaks down in Scotland:

First-time buyers

£0 - £175,000: 0%

£175,001 - £250,000: 2%

£250,001 - £325,000: 5%

£325,001 - £750,000: 10%

Over £750,000: 12%

Main home

£0 - £145,000: 0%

£145,001 - £250,000: 2%

£250,001 - £325,000: 5%

£325,001 - £750,000: 10%

Over £750,000: 12%

Second home

£0 - £145,000: 8%

£145,001 - £250,000: 10%

£250,001 - £325,000: 13%

£325,001 - £750,000: 18%

Over £750,000: 20%

Are the LBTT rates likely to change?

The Scottish Government is currently carrying out a review of LBTT which started in early 2025, aimed at looking at “the residential and non-residential LBTT arrangements to ensure the policy intent is still met.” The review will continue until after the next Holyrood elections in 2026.

When do you have to pay LBTT?

You have 30 days after the purchase of a property to pay your LBTT.