Richer than Queen? Non-domicile status of Rishi Sunak's wife under radar

Update: 2022-04-09 07:36 GMT

The non-domicile status of Akshata Murty, the Indian wife of Britain’s Finance Minister Rishi Sunak, has made news for all the wrong reasons in the UK and it is taking a political turn again.

The Opposition has launched an attack on Murty over her non-domicile status which means legally she doesn’t have to pay taxes in the UK for the income earned overseas.

Murty, 42, is the daughter of Infosys co-founder Narayana Murthy.

She owns £700 million in shares of Infosys, from which she received £11.6 million in dividend income last year, according to BBC. Murty would have avoided £2.1 million a year in UK tax through her non-domicile status, as per BBC’s estimate. There were also reports that she is richer than Queen Elizabeth II.

Sunak, who is Chancellor of the Exchequer, was the favourite to be Britain’s next Prime Minister. However, according to reports, his ratings have plummeted following his wife’s tax row. His chances of becoming PM have dropped from 35% to 12%.

He has defended his wife and accused the critics of running a “smear campaign”.

“To smear my wife to get at me is awful… She loves her country like I love mine,” he told The Sun newspaper.

“Every single penny she earns in the UK she pays UK taxes on… and every penny that she earns internationally, for example in India, she would pay the full taxes on that,” he said.

Amid the tax row, there were also reports that Sunak held a US green card till last year while living in the UK. He surrendered it in October 2021.

Deputy Labour leader Angela Rayner has accused Sunak of “swerving questions and switching tax codes even faster than bills are going up for the rest of us.”

“When the Chancellor can’t even honestly say which country, he lives in how on earth can we trust him with our taxes?” she said.

Murty, in a statement issued on Friday (April 8), said she said did want her tax status to be a “distraction” for her husband. She added that she will no longer claim the remittance basis for tax.

“In recent days, people have asked questions about my tax arrangements: to be clear, I have paid tax in this country on my UK income and international tax on my international income. This arrangement is entirely legal and how many non-domiciled people are taxed in the UK. But it has become clear that many do not feel it is compatible with my husband’s role as Chancellor. I understand and appreciate the British sense of fairness and I do not wish my tax status to be a distraction for my husband or to affect my family,” she said.

“For this reason, I will no longer be claiming the remittance basis for tax. This means I will now pay UK tax on an arising basis on all my worldwide income, including dividends and capital gains, wherever in the world that income arises. I do this because I want to, not because the rules require me to. These new arrangements will begin immediately and will also be applied to the tax year just finished (21-22),” she added.

Murty said she would remain an Indian citizen and added that she loves the UK too. “He (Sunak) knows that my long-standing shareholding in Infosys is not just a financial investment but also testament to my father’s work, of which I am incredibly proud… My decision to pay UK tax on all my worldwide income will not change the fact that India remains the country of my birth, citizenship, parents’ home and place of domicile. But I love the UK too.”

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