Rishi Sunak’s millionaire wife avoids tax through non-dom status

Rishi Sunak, Akshata Murthy
Rishi Sunak and wife Akshata Murthy

Rishi Sunak’s millionaire wife has claimed non-domicile status in order to save on her tax bill while her husband was chancellor, it was revealed in the Independent.

Akshata Murthy, whose family business is estimated to be worth around £3.5bn, has continued to use the valuable tax status even after Mr Sunak was put in charge of setting taxes for the country in February 2020, according to two people familiar with her financial arrangements.

Akshata Murthy, who receives about £11.5m in annual dividends from her stake in the Indian IT services company Infosys, declares non-dom status, a scheme that allows people to avoid tax on foreign earnings.

It is not known exactly how much has been saved by Ms Murthy, however, it is believed it could have saved her millions of pounds in tax on foreign earnings over several years.

Murthy, the daughter of Infosys’s billionaire founder, owns a 0.93% stake in the tech firm worth approximately £690m. The company’s most recent accounts suggest that Murthy’s stake would have yielded her £11.6m in dividend payments in the last tax year.

Under UK tax laws, Murthy’s status as a non-dom would mean she would not have had to pay tax on the dividend payment from overseas companies. Infosys is headquartered in Bengaluru, India, and listed on the Indian and New York stock exchange. By contrast, UK resident taxpayers pay a 38.1% tax on dividend payouts.

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

A spokeswoman for Murthy said: “Akshata Murthy is a citizen of India, the country of her birth and parents’ home. India does not allow its citizens to hold the citizenship of another country simultaneously. So, according to British law, Ms Murthy is treated as non-domiciled for UK tax purposes. She has always and will continue to pay UK taxes on all her UK income.”

Miss Murthy used the valuable tax status as recently as April 2020, two months after her husband was made Chancellor, the Independent reported. A source close to Mr Sunak said: ‘Neither of them has done anything wrong and she has complied fully with UK law. They have both followed the rules to the letter.

‘The Treasury has known about this all the time he has been there and when he became a junior minister in 2018, he went out of his way to provide extra disclosure to the Cabinet Office that was not strictly required.’

The revelation – on the day Mr Sunak hiked taxes for millions of workers – prompted Labour to claim it was ‘yet another example of the Tories thinking it is one rule for them – another for everyone else’.

The annual charge for gaining non-dom status in the UK ranges from £30,000 to £60,000 depending on how long a citizen has lived in the country.

It is understood that Miss Murthy has been living in the UK for nine years. The couple, who now have two daughters, met at university in California and were married in 2009.

The Treasury declined to comment.

It comes days after it was revealed the Chancellor’s wife has a £490million stake in a company still operating in Moscow.

Akshata Murthy owned shares of Infosys, an Indian IT company founded by her billionaire father with huge assets in Moscow.

The company recently closed its operations in Russia. The step followed criticism about the contrast between its ongoing presence in the country and Mr Sunak’s public call on all companies to “think very carefully” about maintaining any investments in Russia, following the Putin regime’s violent invasion of Ukraine.

As an Indian company, Infosys was not subject to the sanctions imposed by the British Government. It has an office on Kulakov Lane in Moscow and in 2016 set up a development centre in the Russian capital.

At the time the company said the base would operate as a centre of excellence “in turbomachinery, aerospace and automotive” tapping into the “wealth of heavy engineering skills” in the country.

Infosys also reportedly has historic ties with Russia’s fourth-largest financial institution Alfa-Bank, which had its assets frozen today by the UK government in the latest round of sanctions.

It is controlled by Mikhail Friedman who was sanctioned by Britain earlier this month and his business partners. Friedman, who was born in Ukraine, owns Athlone House, a £150 million mansion overlooking Hampstead Heath.

Mr Sunak has not declared his wife’s shareholdings on the Register of Members’ Interests and previously said he has ”followed the ministerial code to the letter”.

The ministerial code states that ministers “must ensure that no conflict arises, or could reasonably be perceived to arise, between their public duties and their private interests, financial or otherwise”. It adds that on appointment, ministers have to provide a list of all interests that “might be thought to give rise to a conflict”, this should also cover “interests of the minister’s spouse or partner and close family”.

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