Rishi Sunak's wife under fire in Britain for non-domicile status

LONDON: Akshata Murthy, Indian wife of chancellor of the exchequer (finance minister of the UK) Rishi Sunak, is under fire in Britain after it came out that she enjoys non-domiciled status in the UK. Critics say that she is using this to shelter from UK taxes.
The Independent newspaper claimed the multi-millionaire, whose personal fortune is estimated to be at £430 million (Rs 4,274 crore), “could have saved millions of pounds in UK taxes on foreign earnings over several years” as a result of her non-domicile status.
This comes as Sunak’s popularity in Britain plummeted since delivering his spring statement in March with a net favourability now of minus 29 in the latest YouGov polling, which found that most Britons (57%) have an unfavourable opinion of him.
A person who is registered as non-domiciled does not have to pay UK tax on income gained overseas unless they bring their money into the UK.
According to Infosys’ quarterly filings ending December 31, 2021, Murthy, 42, has a 0.93% stake in the Indian company. Her dividend payments from Infosys would have totalled around £11.6m (Rs 115 crore) in the past year meaning that, were she a UK resident, she would have had to pay £4.4m (Rs 43 crore) in taxes on them.
Indian steel magnate Lakshmi Mittal, who lives in London, also holds non-domicile status.
Murthy's spokeswoman said that as a citizen of India, Murthy is treated under British law as non-domiciled for UK tax purposes because India does not allow its citizens to hold dual nationality.
"She has always and will continue to pay UK taxes on all her UK income,” the spokeswoman said. Murthy pays foreign taxes on her foreign income.
Tulip Siddiq, MP, shadow economic secretary to the treasury, said: “The chancellor has imposed tax hike after tax hike on the British people. It is staggering that -- at the same time -- his family may have been benefiting from tax reduction schemes. Rishi Sunak must now urgently explain how much he and his family have saved on their own tax bill.”
Former Labour leader, Ed Miliband, said: “There is an immediate question for the chancellor to answer about his immediate family shielding themselves from UK taxes.”
Labour’s shadow financial secretary to the treasury, James Murray, on Thursday wrote to the chancellor asking for urgent answers.
“It appears Ms Murthy has used her non-domicile tax status to reduce the amount of tax she pays on her overseas earnings. You may have personally benefited directly from Ms Murthy’s non-domiciled status. You are in charge of creating tax policy for our country, and any threat to its integrity must be removed,” the letter said, demanding details of Murthy’s investments through trusts or companies in offshore jurisdictions.
Business and energy secretary, Kwasi Kwarteng, said the chancellor had always been "transparent" about the status his wife holds. He said: “It is a non-domicile status which is utterly legal. She pays tax on her UK income and on her foreign income, she pays tax outside the UK – that is what non-domicile status means.”
Sunak has been relentlessly attacked in the UK media in recent weeks, even being accused of profiting from Putin’s regime through his family links to Infosys, which has an operation in Russia, even though he has no connection to the company.
Many in the Indian diaspora are questioning whether there is an orchestrated campaign against Sunak, who on Tuesday was condemned simply for giving a £1,00,000 (Rs 1 crore) donation to his old school, Winchester College, to help fund scholarships.
Kapil Dudakia, UK-based political analyst, said: “Rishi is rich enough not to need the hassle, and is actually in politics because he feels he can make a difference. I feel there are those in politics and media who find it hard to stomach that a person of colour can come so close to No. 10. Remember, first they attacked Priti Patel, then Rishi, and now his wife Akshata, who by the way has broken no laws.”
When asked about Murthy’s non-domicile status, UK PM Boris Johnson said: “I think it is very important in politics, if you possibly can, to try to keep people’s families out of it.”