Shouldn’t millionaires also pay tax in the UK?

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Chancellor Rishi Sunak’s family have been accused of ‘sheltering’ from paying tax in the UK after it emerged his wife held non-domiciled status.

Akshata Murty, who is believed to be worth hundreds of millions of pounds, has confirmed the arrangement which means she is not legally entitled to pay tax in Britain on foreign income.

Murty, the fashion designer daughter of a billionaire who married the Chancellor in 2009, insisted she paid tax on all UK earnings and said the set up was necessary as she is an Indian citizen . However, experts have disputed this.

Chancellor Rishi Sunak and his wife Akshata Murty watch a test match at Lord’s (PA)

His tax status is a “choice”

Professor Richard Murphy, a University of Sheffield academic who co-founded the Tax Justice Network, questioned her statement, insisting that being a non-dom (not domiciled) is a ‘choice’ she can to renouncer. He said:

Domicile has nothing to do with a person’s nationality,

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In other words, the claims made in the statement released by Ms Murty are false, and as evidence, the mere fact that someone has Indian citizenship will never automatically grant them non-dom status in the UK.

Labor MP for Hampstead and Kilburn Tulip Siddiq said Sunak had “big questions to answer”:

Trade unionist Clare Hepworth asked:

While Accounting Professor Emeritus Prem Sikka added:

Business Secretary Kwasi Kwarteng defended the arrangement as ‘in order’ as he called the review of his finances ‘completely unfair’ but was unable to rule out the statute being used to reduce taxes.

Protect income from UK taxes

Labor leader and shadow climate change secretary Ed Miliband said the questions were legitimate because Sunak’s immediate family “house much of his income from UK tax”. Murty confirmed his “non-dom” status after the Independent the website first reported it on the day the Chancellor’s National Insurance hike took effect on Wednesday.

The arrangement means his permanent residence is considered outside the UK despite the Sunaks occupying Downing Street. Miliband said BBC breakfast:

The question here that Rishi Sunak has to answer – and I think we have to be careful about people’s spouses being brought into the public domain, but I think it’s a legitimate question – which is, at some point where people face incredibly stretched finances and Rishi Sunak raises taxes, he says to pay for utilities, his immediate family shields much of his income from UK taxes.

I think there is a legitimate public question as to whether this is the right decision because he is the one asking us to pay more taxes.

Kwarteng dismissed the allegation as false, saying “housing sounds like you’re avoiding things”. He said BBC breakfast:

I think she was very clear, she was very transparent, the chancellor was very transparent, and this non-dom status has been part of the British tax system for over 200 years,

The Royal Family attends the British Asian Trust reception – London
Akshata Murty attends a reception to celebrate the British Asian Trust at the British Museum in London (Ian West/PA)

Pay taxes abroad

The minister said she pays taxes ‘abroad’ but was unable to say where when asked if she pays all foreign taxes in India or in a tax haven like the Cayman Islands. Asked on BBC Radio 4it is Today program if Murty is a tax evader, Kwarteng replied:

I don’t know anything about his tax affairs.

What I do know is she has been very clear that she is an Indian citizen, once she has lived here for 15 years the non-domiciled status drops so it will happen in a few years, I don’t know when.

As far as I’m concerned, that’s enough for me and I think we can move on.

A spokeswoman for Murty confirmed she held non-dom status after reports surfaced. The spokeswoman said:

Akshata Murty is a citizen of India, the country of her birth and the home of her parents,

India does not allow its citizens to simultaneously hold the citizenship of another country.

Thus, under UK law, Ms Murty is considered not domiciled for UK tax purposes.

She has always paid and will continue to pay UK tax on all her UK income.

It is understood that Sunak declared his wife’s tax status when he became a minister in 2018 and that the Treasury was also aware so that any potential disputes could be managed. Murty is listed on LinkedIn as a director of equity and private equity firm Catamaran Ventures, gym chain Digme Fitness, and men’s outfitters New and Lingwood. She also reportedly owns a 0.91% stake in Infosys, which was founded by her now-billionaire father.

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