AKSHATA MURTY, wife of British Chancellor Rishi Sunak, announced on Friday (8) that she would start paying UK tax on ‘all worldwide income’, amid controversy over her non-domiciled status.
Sunak has accused critics of mounting a “smear” campaign against his wealthy Indian wife, whose substantial overseas earnings have been sheltered from British taxes.
The Labor opposition has accused Sunak of “breathtaking hypocrisy” after raising taxes on ordinary Britons amid a cost of living crisis.
In a statement, Murty, daughter of Indian billionaire NR Narayana Murthy, said she did not want her non-domiciled status to be a “distraction” for her husband.
“This means that I will now pay UK tax on the basis of all my worldwide income, including dividends and capital gains, wherever that income is generated in the world.”
Murty stressed that she was making the change “because I want to, not because the rules require me to”, adding that the new arrangements will start “immediately”.
The Guardian estimated that Murty has received £54.5million in dividends from family-owned Infosys since 2015. His status allowed him to avoid paying £20million in tax to the UK Treasury, according to the newspaper. .
Earlier, her husband told Friday’s edition of The Sun newspaper that ‘smearing my wife to attack me is awful’.
Sunak, once a leading contender to succeed Prime Minister Boris Johnson, has seen his popularity plummet in recent weeks as consumer prices have risen across the board.
“She loves her country”
The Independent revealed that Sunak was among the beneficiaries of trusts in the British Virgin Islands and the Cayman Islands, two tax havens.
It has fueled opposition criticism that Tories are taking advantage of the system for their own convenience, ignoring the rules imposed on others.
Speaking ahead of his wife’s announcement, Sunak told The Sun: “It would not be reasonable or fair to ask her to sever ties with her country because she happens to be married to me.”
“She loves her country. As I love mine,” he said, adding that “every penny she earns in the UK she pays UK tax”.
A person’s domicile is usually the country their father considered their permanent residence when the person was born, although this may change if the person plans to live permanently in Britain.
Murty is legally entitled to claim the status, but she ultimately said the UK – the country in which her husband holds the second highest political office – is not her permanent residence.
And contradicting Sunak, the tax lawyers had noted that Murty could still pay tax in Britain on his aggregate income without giving up his Indian citizenship.
The finance minister’s allies have told the Daily Telegraph they believe Johnson’s office was behind the recent damaging leaks.
They said the Prime Minister believed Sunak had failed to support him enough during an ongoing scandal at Downing Street lockdown parties.
Johnson denied knowledge of any information operations against Sunak and told reporters his chancellor was doing an “absolutely outstanding job”.
“And I don’t think people’s families should be dragged into things,” he said.
A recent YouGov poll showed Sunak’s rating fell 24 percentage points in the past two weeks, following a budget statement criticized for ignoring the plight of struggling Britons.