Britain’s Deputy Prime Minister Angela Rayner resigned on Friday after an official investigation found she breached the ministerial code by underpaying property tax, dealing a significant blow to Prime Minister Keir Starmer’s Labour government.

Rayner, a prominent figure among Labour’s left wing, admitted earlier this week that she had failed to pay the correct amount of tax on the purchase of a flat. She referred herself to the government’s independent ethics adviser after reports alleged she had benefited by tens of thousands of pounds.

In a letter to Starmer, ethics chief Laurie Magnus wrote that Rayner had ignored legal advice and in doing so breached the ministerial code.

“Given the findings, and the impact on my family, I have therefore decided to resign,” Rayner said in her letter, announcing she would also step down as housing minister and deputy leader of the Labour Party. “I deeply regret my decision to not seek additional specialist tax advice. I take full responsibility for this error.”

Starmer, in his response, said he was “very sad” to lose her from government but assured her she would “remain a major figure in our party.”

The controversy centers on stamp duty, a property tax. Rayner disclosed this week that she had underpaid after purchasing a flat in southern England. Reports suggested she avoided about £40,000 ($53,000) by removing her name from the deeds of another property. She explained that following her divorce in 2023, she sold her share of the family home to a trust fund to safeguard it for her child’s future and used the proceeds to buy the flat.

She initially claimed the flat was her main home, allowing her to pay a lower rate of tax, but later admitted this was incorrect because her son, who is under 18, was still dependent on her.

Magnus acknowledged that Rayner had “acted with integrity and with a dedicated and exemplary commitment to public service,” but concluded that the ministerial code had nonetheless been breached.

Rayner’s departure is a personal and political setback for Starmer. At 45, she had often been seen as a potential future Labour leader and was a frequent target of Conservative attacks and scrutiny from right-leaning media.

Raised in Stockport, on the outskirts of Manchester, Rayner left school with no qualifications after becoming pregnant at 16. Her plainspoken style and working-class background made her a popular voice among Labour’s grassroots. She is also the mother of three sons, one of whom was born prematurely and is registered blind with lifelong special needs.

Her resignation removes one of the most high-profile figures from the Labour front bench at a moment when Starmer’s government faces mounting political challenges.