She has stepped down as housing secretary, Deputy Prime Minister and as deputy leader of the Labour Party, a position to which she was elected by party members. 

The Ashton-under-Lyne MP referred herself to the Prime Minister’s standards adviser earlier this week, after she had underpaid taxes on her flat, which led to opposition calls that she should resign. 

Rayner claimed she had been badly advised when making the purchase. 

Last year, the government increased the stamp duty surcharge on second homes and investment properties from 3% to 5% with immediate effect. 

The Prime Minister’s standards adviser, Sir Laurie Magnus, says in his report into the matter to Keir Starmer:  “It is highly unfortunate that Ms Rayner failed to pay the correct rate of stamp duty on this purchase, particularly given her status and responsibilities as the Secretary of State for Housing, Communities and Local Government and as Deputy Prime Minister.” 

“She believed that she relied on the legal advice she had received, but unfortunately did not heed the caution contained within it, which acknowledged that it did not constitute expert tax advice and which suggested that expert advice be sought.” 

Magnus adds that “the responsibility of any taxpayer for reporting their tax returns and settling their liabilities rests ultimately on themselves alone”. 

The standards adviser concludes: “Accordingly, it is with deep regret that I must advise you that in these circumstances, I consider the Code to have been breached.” 

Rayner, in her resignation letter to Starmer, says: “I deeply regret my decision to not seek additional specialist tax advice given both my position as Housing Secretary and my complex family arrangements.  

“I take full responsibility for this error. 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 Prime Minister, in a handwritten reply, accepted her resignation, adding that it was “very sad that your time as deputy prime minister, secretary of state and deputy leader of the Labour Party has ended in this way”. 

Starmer also says that Rayner was “right” to refer herself to the independent adviser on ministerial standards and “right to act on his conclusion”. 

The Prime Minister is now understood to be making his first major reshuffle since taking office in July last year. 

Experts say that the stamp duty Rayner should have been paid on her Hove might be as much as £40,000, after she incorrectly paid the lower rate. 

Months before the Hove purchase in May, Rayner had put her stake in another home in Ashton into a trust that was set up in 2020 to manage a payment to one of her sons.