Britain’s embattled prime minister, Keir Starmer, suffered a gut punch on Friday, as his deputy prime minister, Angela Rayner, resigned after admitting that she had failed to pay adequate taxes on the purchase of a seaside apartment.
Ms. Rayner, a plain-spoken politician who is a popular figure on the left wing of the Labour Party, stepped down after an independent ethics adviser concluded that she had breached the code of conduct for cabinet ministers. She erred in underpaying the tax as part of a complex transaction involving another house that she had owned with her former husband.
“I accept that I did not meet the highest standards in relation to my property purchase,” Ms. Rayner said in a letter to Mr. Starmer. “I take full responsibility for this error,” she said, adding, “it was never my intention to do anything other than pay the right amount.”
Mr. Starmer accepted her resignation with palpable regret, replying in a three-page handwritten note, “I am very sad to be losing you from the government. You have been a trusted colleague and a true friend for many years.”
Although the ethics adviser, Laurie Magnus, wrote that he did not believe Ms. Rayner set out to evade taxes, he said that she had failed to heed advice from financial and legal advisers that she should consult tax lawyers to determine her obligations. That fell short, he concluded, of the “highest standards of proper conduct” that apply to top government officials.
Her resignation deepens a sense of the disarray around Mr. Starmer’s government, which has struggled with a stagnant economy, lurching economic policies and a resurgent populist right. The Labour Party now trails an anti-immigration party, Reform U.K., by nearly double digits in opinion polls.
Adding to the political complications for Mr. Starmer, Ms. Rayner had responsibility for housing issues, in addition to being deputy prime minister. Ms. Rayner also resigned on Friday as deputy leader of the Labour Party, setting the stage for a potentially stormy battle to replace her.
Minutes after the news of her resignation broke, Downing Street indicated that Mr. Starmer was embarking on a shake-up of his cabinet, with several other ministers expected to be shuffled, though not the chancellor of the Exchequer, Rachel Reeves, who is drafting a new budget to be presented in November.
While Ms. Rayner’s departure puts a quick end to a highly personal drama that had transfixed British political circles for two weeks, it will cost Mr. Starmer a powerful ally who served as a bridge to Labour’s restive left. Ms. Rayner will retain her seat in Parliament, which some analysts said meant she could potentially make a comeback or emerge as a potential rival to the prime minister.
Opposition parties were quick to exploit Ms Rayner’s announcement. The leader of the Conservative Party, Kemi Badenoch, said in a statement that the government was in “total disarray,” adding that Mr. Starmer had “lost his housing secretary for dodging property taxes while lobbying to put them up.”
Nigel Farage, the right-wing populist whose Reform U.K. party was gathering Friday in Birmingham for its annual conference, moved up his keynote address to 1 p.m., presumably to seize on the news of Ms. Rayner’s departure.
Her meteoric political rise has been cut short by a tangled chain of events that began in May, after she bought an apartment in Hove, on England’s southeast coast, as a vacation home. On Wednesday, she said in a statement that she had contacted the tax authorities to notify them that she owed additional “stamp duty,” a tax paid in England by the buyer of a residential property above a certain price.
Ms. Rayner insisted that the underpayment was an innocent mistake, a result of complex arrangements involving a financial trust that she established for her disabled son in 2020, and another house near Manchester, which she had owned with her ex-husband and where she still lives some of the time.
Ms. Rayner said that she and her ex-husband, whom she divorced in 2023, alternated living in the house, where they cared for their son. The trust was designed to secure part-ownership of the house for the child.
After British newspapers raised questions about her tax payments, she consulted a prominent lawyer, who concluded that this arrangement did not shield her from paying a higher tax rate for the apartment, since it qualified as a second home.
In his report, Mr. Magnus credited Ms. Rayner with taking those steps. He noted that she was told twice in writing by her advisers that she was entitled to pay a lower rate of tax.
But that advice, Mr. Magnus said, was qualified by a recommendation that she seek an opinion from legal experts on tax issues, which she did not.
“The responsibility of any taxpayer for reporting their tax returns and settling their liabilities ultimately rests on themselves alone,” Mr. Magnus wrote. He added, “it is deeply regrettable that the specific tax advice was not sought.”
Ms. Rayner said her decision to resign was also driven by the pressure the episode had put on her family. “My family did not choose to have their private lives interrogated and exposed so publicly,” she wrote. “The strain I am putting under through staying in post has become unbearable.”
Mark Landler is the London bureau chief of The Times, covering the United Kingdom, as well as American foreign policy in Europe, Asia and the Middle East. He has been a journalist for more than three decades.
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