Angela Rayner used £160,000 from a trust established to care for her disabled son to purchase the £800,000 seafront flat involved in a sleaze investigation.
The Deputy Prime Minister sold a 25 per cent share of her house in Ashton-under-Lyne, Greater Manchester, to the trust for £162,500.
Ms Rayner stated on Wednesday that her son, who was born prematurely, received an award five years ago and a trust was established to protect his interests.
According to the Telegraph, the payout resulted from an 11-year legal battle between the hospital where her son was born and the Rayner family.
Sources suggest the NHS has paid compensation following the difficulties during her birth and care in 2008.
Final payments can take several years due to the lengthy assessment process for long-term damage.
It is unclear how much money was paid out as part of the damages claimed; however, it was a large sum of money for the trust to buy Ms Rayner's share at the end of January 2025.
Ms Rayner then used the money to put a deposit down on the flat in Hove she purchased in May this year.
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Ms Rayner has been the centre of controversy after it was discovered that she underpaid stamp duty on her second home by £40,000
| GETTYMs Rayner only paid £30,000 in stamp duty rather than £70,000, which she should have paid in tax on the second home.
She said an error was made despite previously insisting she had paid all appropriate tax.
The Secretary of State for Housing is blaming the error on legal advice given to her when she bought the Hove apartment.
In a lengthy statement issued on Wednesday, the Deputy Prime Minister stated she had transferred her share of the house to her 17-year-old son's trust to make sure he had "stability in the family home".
WATCH: Angela Rayner admits wrongdoing over tax affairs
The trust is believed to own three-quarters of the house in Ashton-under-Lyne, and Ms Rayner's ex-husband owns the other 25 per cent.
Ms Rayner said she can now speak about her financial arrangements and complex private life following her divorce from Mark Rayner in 2023.
She applied to court to have her confidential information disclosed to enable her to explain her side of what happened.
She said: "Following the substantial scrutiny surrounding my living arrangements, I wanted to set out the facts as openly and transparently as I can.
Ms Rayner said she applied to court to have her confidential information disclosed
| GETTY"Until now, an undertaking in a court order prevented me from disclosing information about certain aspects of my personal life.
"In the interests of public transparency, I applied to the court, and I was last night released from this undertaking."
Ms Rayner accepted "family life can be complicated", adding that "any families across the country" face "complexities" like hers.
Conservative leader Kemi Badenoch called for Sir Keir Starmer to sack Ms Rayner if the Prime Minister had a "backbone".
Mrs Badenoch called for Ms Rayner to be sacked
| PASpeaking at Prime Minister's Questions (PMQs), she said: "I welcome the fact that the Deputy Prime Minister has referred herself to the ethics adviser.
"She has admitted she underpaid tax. So why is she still in office?"
Reform UK leader Nigel Farage said he does not "see how she [Ms Rayner] survives".
Mr Farage told GB News: "If a case like that were me, you'd all be demanding that I resign. The facts are all out there in the open.
"She's admitted she's done it. It's certainly an HMRC issue to begin with. I just don't see how you survived this."
WATCH: Nigel Farage delivers his verdict on Angela Rayner over stamp duty row
Sir Keir defended Ms Rayner at PMQs today, saying he is "proud" to sit alongside the Deputy Prime Minister.
Mr Starmer said: "In relation to the Deputy Prime Minister, she has explained her personal circumstances in detail.
"She has gone over and above in setting out the details... I am very proud to sit alongside a Deputy Prime Minister who is building 1.5million new homes and bringing the biggest upgrades to workers' rights in a generation, and who has come from a working-class background to be Deputy Prime Minister of this country."
GB News has approached the Deputy PM for comment.