Rishi Sunak has admitted holding a US green card while he was UK chancellor because he had “lived and worked” in America.
Mr Sunak was granted permanent residency in the US – but returned the green card when making his first trip to the country as chancellor in October 2021, according to his spokeswoman.
Labour had urged the chancellor to “come clean” on both his US residency arrangements and his family’s tax affairs after The Independent revealed that his wife Akshata Murty has non-dom tax status.
On Friday Mr Sunak released a statement admitting he had held a green card which allowed permanant residency in the US until around October 2021, having become chancellor back in February 2020.
“Rishi Sunak had a green card when he lived and worked in the US,” said his spokeswoman – who suggested the chancellor had paid US taxes during the 19-month period.
The chancellor’s spokeswoman said Mr Sunak had not been “presumed” to be a US resident “just by dint of holding a green card”.
She also said Mr Sunak had followed “all guidance and continued to file US tax returns, but specifically as a non-resident, in full compliance with the law”.
The spokeswoman said: “Upon his first trip to the US in a government capacity as chancellor, he discussed the appropriate course of action with the US authorities. At that point it was considered best to return his green card, which he did immediately.”
She added: “All laws and rules have been followed and full taxes have been paid where required in the duration he held his green card.”
However, Labour said the chancellor’s admission that he held a US green card for the first 19 months of his time in the post only “begs further questions”.
Pat McFadden, shadow Treasury secretary, said: “Why did he keep a green gard for so long while being a UK MP? Was there any tax advantage in doing so? And why did he give this up after holding it for so long?”
The Liberal Democrats accused Mr Sunak of breaking the ministerial code – pointing to sections which require ministers to be “as open as possible” and ensure “no conflict arises, or appears to arise” between public duties and private interests.
“It turns out he has failed to keep to the ministerial code,” said Lib Dem leader Sir Ed Davey. “Never mind a green card, it’s time to give Rishi Sunak the red card.”
It comes as Boris Johnson denied that he and his No 10 team had been briefing against Mr Sunak – insisting that he had not known anything about the non-dom tax status used by chancellor’s wife.
Mr Sunak has blamed Labour for the fact that details of his wife’s tax arrangements first emerged in The Independent this week – but some of the chancellor’s allies have said they suspect No 10 has been trying to undermine the chancellor.
The prime minister told a Downing Street press conference: “If there are such briefings, they are not coming from us in No 10 – heaven knows where they are coming from.”
Backing his under-pressure chancellor, Mr Johnson said: “I think that Rishi is doing an absolutely outstanding job,” adding: “I don’t think people’s families should be dragged into things.”
Mr Johnson also suggested the chancellor had done nothing wrong when it came to his use of a US green card. “As I understand it the chancellor has done absolutely everything he was required to do,” said the PM
Earlier, in an interview with The Sun, Mr Sunak said there had been attempts to “smear my wife to get at me”. Asked if he thought Labour was behind a smear campaign, Mr Sunak replied: “Yeah.”
But a Labour source responded: “The chancellor would do better to look a little closer to home. It’s clear that No 10 are the ones briefing against Rishi Sunak.”
Sir Keir Starmer said Mr Sunak and his family will probably “be alright” in the cost-of-living crisis following revelations about the chancellor’s wife’s tax status.
“What the chancellor needs to do is to just come clean,” said the Labour leader. “If the chancellor’s family … are using schemes to reduce their own household tax, then the public are entitled to know about that.”
Ms Murty – who has reportedly received £11.6m in dividends from an Indian IT giant firm founded by her father in the past year – has confirmed she paid £30,000 to hold non-dom status.
The arrangement may have saved Ms Murty up to £20m, according to one estimate – but Mr Sunak claimed the non-dom status was not about paying less tax in India. “The rates don’t make a difference … She loves her country like I love mine,” he told The Sun.
Rishi Sunak alongside his wife Akshata Murthy (Ian West/PA)
Labour frontbencher Emily Thornberry, shadow attorney general, raised questions about whether Mr Sunak had followed the ministerial code – which mentions that the financial status of ministers’ spouses is relevant because “there can be a conflict of interest”.
On Friday she suggested that Mr Sunak “didn’t declare it properly”, referring to Ms Murty’s tax status.
But the Treasury denied that the ministertial code had been breached. “The chancellor provided a full list of all relevant interests when he first became a minister in 2018, as required by the ministerial code.
“The Independent Adviser on Ministers’ Interests has confirmed that they are completely satisfied with the steps the chancellor has taken to meet the requirements of the Code.”
Senior Conservative MP Tobias Ellwood said the UK’s non-dom rules be changed. “In my view, they are out of date, they do need to be reviewed.”
Ms Thornberry suggested that Mr Sunak could not be an impartial player in any discussion of reform to non-dom tax rules because of the “clear conflict of interest” presented by his wife’s tax affairs.
