Rishi Sunak has broken his silence on his wife’s tax affairs, insisting she “hasn’t broken any laws” after The Independent revealed she has continued to use non-dom status since he became chancellor.
The chancellor faced accusations of “breathtaking hypocrisy” and cross-party demands to answer “very serious questions” over his family’s financial affairs after it emerged that his wife Akshata Murty pays no tax in the UK on her vast foreign earnings, potentially saving her millions of pounds.
Addressing the matter on Thursday night, Mr Sunak hit out at what he called “smears” directed at his family, saying that scrutiny of his wife was unfair because she is a “private citizen”.
“It’s unpleasant, especially when she hasn’t done anything wrong,” the chancellor told The Sun. “She hasn’t broken any rules. She’s followed the letter of the law. And if she was living here and didn’t just happen to be married to me this obviously would not be at all relevant.”
Mr Sunak said that while “in the past British people were trying to use [non-dom status] to basically not pay any tax in the UK”, that was “not the case here”.
“What it comes down to is, my wife was born in India, raised in India,” he added. “Her family home is in India, she obviously has a very close connection. She has investments and a career independent of me. She had this well before we met, before she moved to this country.
“It wouldn’t 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. Like I love mine, I would never dream of giving up my British citizenship. And I imagine most people wouldn’t.”
His comments echo a statement issued by a spokesperson for Ms Murty on Wednesday – the day Mr Sunak’s national insurance hike came into effect – claiming that she had to use non-dom status because of her Indian citizenship.
“India does not allow its citizens to hold the citizenship of another country simultaneously,” the statement said. “So, according to British law, Ms Murty is treated as non-domiciled for UK tax purposes. She has always and will continue to pay UK taxes on all her UK income.”
But tax lawyers dismissed the suggestion that Ms Murty’s non-dom status is a consequence of her Indian citizenship, saying that people can choose whether they are non-domiciled for tax purposes.
“It’s just not how it works. You have to tick a box on your tax return, claiming what’s called the remittance basis. An actual box. So that’s a choice that she made,” Dan Neidle, a senior tax lawyer, said.
While Boris Johnson dodged a question on Thursday about the revelations, Sir Keir Starmer hit out at Mr Sunak for having “imposed tax rise after tax rise on working people” and saying “time and again there’s no alternative”.
“If it now transpires that his wife has used schemes to reduce her own tax then that’s breathtaking hypocrisy and is more evidence of just how out of touch this chancellor is, and I think he’s got very, very serious questions to answer in relation to these schemes,” the Labour leader said.
His comments came as Labour sent 12 questions to Mr Sunak, demanding to know whether the chancellor has gained personally from Ms Murty’s tax arrangements.
Asked by The Sun if he believed his family were victims of a Labour smear campaign, Mr Sunak replied that he did, saying: “To smear my wife to get at me is awful, right?”
Ms Murty is listed on LinkedIn as being director of capital at private equity firm Catamaran Ventures, gym chain Digme Fitness and gentlemen’s outfitters New & Lingwood.
She is also reported to hold a 0.91 per cent stake in the tech giant Infosys, which was founded by her father, Narayana Murty.
