Chancellor’s wife to pay tax on foreign earnings
Rishi Sunak’s wife, Akshata Murty, has announced that she will pay tax on her foreign income after confirming her non-domicile tax status last week
The decision to change her tax arrangements followed accusations of hypocrisy against the Chancellor from opposition parties saying that Sunak’s family is benefiting during a time when many are being hit financially due to the cost of living crisis and increase in National Insurance contribution (NICs).
A statement released by Murty said: ‘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. For this reason, I will no longer be claiming the remittance basis for tax.
‘I will now pay UK tax on an arising basis on all my worldwide income, including dividends and capital gains, wherever in the world [it] 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.’
The Independent first revealed Murty’s non-dom tax status last week which meant that she did not pay tax on her foreign earnings as she was a citizen of India.
The issue arose as Murty holds a 1% stake in her father’s multi-billion-pound software company Infosys, with the BBC estimating that she had avoided £2.1m a year through the non-dom status.
On Sunday, the Chancellor wrote to Prime Minister Boris Johnson asking for Lord Geidt, Johnson’s independent adviser on ministerial interests, to review Sunak’s declarations of interest since he first became a minister in 2018 to ensure they had been properly stated.
Sunak stated he was confident he had acted appropriately at all times but his ‘overriding concern’ was that the public should have confidence in the answers.
This came after it was confirmed that Sunak held a US green card while Chancellor until seeking guidance ahead of his first US trip in a government capacity, in October last year.
At a later Downing Street press conference, Johnson said claimed that he was unaware that the Chancellor held a US green card but stressed that Sunak had ‘done absolutely everything he was required to do’.
Labour’s deputy leader Angela Rayner also wrote to Johnson asking for an inquiry that would provide answers about whether Sunak had ever benefited from the use of tax havens, whether he made a legal promise to the US when he received his green card that it was his permanent residence, and, if so, whether he was legally a permanent US resident when he entered parliament and became a minister.
The drama has erupted at a time when Sunak is already under pressure from the criticism against his Spring Statement last month that many argued did little to help low income families struggling with the spiralling cost of living.
According to a YouGov survey, Sunak’s net favourability was down 24 points since just before the Spring Statement on March 23, reaching minus 29.
Story wrote by Ruby Flanagan.