Sunak’s wife to pay UK tax on overseas income

Rishi Sunak’s wife will pay UK tax on her overseas income after a row over the appropriateness of her non-dom status, she announced yesterday.

The Chancellor’s wife, Akshata Murty, an Indian national, said she will pay UK taxes on her foreign income to avoid becoming a “distraction” for her husband’s political career.

Critics have accused Murty of benefitting from her non-dom status by slashing her tax bills at a time when households are being saddled with heaviest tax burden since the late 1940s.

“In recent days, people have asked questions about my tax arrangements: to be clear, I have paid tax in this country on my UK income and international tax on my international income,” Murty said.

The non-dom “arrangement is entirely legal and how many non-domiciled people are taxed in the UK,” she said, adding “it has become clear that many do not feel it is compatible with my husband’s role as Chancellor.”

“I will now pay UK tax on an arising basis on all my worldwide income, including dividends and capital gains, wherever in the world that income arises.”

Akshata Murty

“I do this because I want to, not because the rules require me to,” she added.

The move comes as it was revealed the couple had retained their US green cards for a year after Sunak became Chancellor in 2020.

Green card holders need to consider the US their permanent residence.

Sunak has hit back at criticism of his wife’s tax affairs, claiming the attack is part of a “smear” campaign.

He told The Sun it was unfair to attack his wife as she was a “private citizen”.

“I’m an elected politician. So I know what I signed up for,” he added.

Murty will keep her non-dom status, at the cost of £30,000 a year to the government, and Indian citizenship. India does not allow citizens to hold dual-nationalities.

Retaining the non-dom status will allow Murty to avoid paying inheritance tax on her estate.

What is a non-dom?

A non-dom is someone who lives in the UK but tells the taxman their permanent residence is outside the country.

It allows individuals to shield their overseas income from UK tax rates.

It can help people retain more of their income if the country they declare their permanent residence in has lower taxes than Britain.

Individuals are given the option on their tax return form to declare where their permanent residence is.