Deputy Prime Minister Angela Rayner has admitted she did not pay enough tax on her second home, and has referred herself to the adviser on the ministerial code.
The senior Labour figure said underpaying stamp duty on the £800,000 seaside flat in Hove was an "error" that she "deeply regrets".
Rayner, who is also the housing secretary, said she has been "in shock" and "devastated" over the fallout and that she had spoken to her family about quitting.
She has been under increasing pressure to be transparent about her tax affairs, after it was reported she saved £40,000 in stamp duty on the Hove property by removing her name from the deeds of her home in Ashton-under-Lyne.
On Wednesday, she released a statement saying she had taken legal advice when buying the south coast flat in 2025, which suggested she was "liable to pay standard stamp duty".
She said she had since learned the advice was inaccurate because the stake of her Ashton home she put into a trust (set up in 2020 for her disabled son) meant that the Hove property could not be treated as her only residence.
In the statement, Rayner said: "I acknowledge that due to my reliance on advice from lawyers which did not properly take account of these provisions, I did not pay the appropriate stamp duty at the time of the purchase.
"I am working with expert lawyers and with HMRC to resolve the matter and pay what is due."
She continued: "The arrangements I have set out reflect the reality that family life is rarely straightforward, particularly when dealing with disability, divorce and the complexities of ensuring your children’s long-term security.
"Every decision I have made has been guided by what I believe to be in my children’s best interests.
"I deeply regret the error that has been made.
"I am committed to resolving this matter fully and providing the transparency that public service demands."
