LONDON (AP) – Britain’s Treasury chief has defended his wife’s decision to take advantage of rules that allow many foreigners to avoid UK taxes on their foreign income, saying critics have turned against her. A smear campaign has been launched.
In an interview with Sun newspaper, Rishi Sunak said that he expects scrutiny as a politician, but it is unfair to attack his wife Akshata Murthy, a private citizen with a career of her own and independent investments. . Murthy, a fashion designer and businessman, is also the daughter of the Indian billionaire who founded the information technology company Infosys.
Opposition politicians have demanded more information about Murthy’s finances after she confirmed that she has received “non-domicile” tax status, which allows people who are not permanent residents to earn money abroad. But allow the British to evade taxes. The issue is sensitive to Sunak as he has increased the income taxes paid by most of the UK’s residents amid the crisis of livelihood.
“It is terrible to defame my wife for attacking me,” Sunak was quoted as saying. “Every penny she earns in the UK pays UK taxes, of course she does. And every penny she earns internationally, for example in India, she will pay full tax on that.
Sunak said Murthy was entitled to use the arrangement as she is an Indian citizen and intends to return to her country at some point to take care of her aging parents.
But the opposition Labor Party rejected Sunak’s explanation, noting that Murthy has lived in Britain for several years and is married to one of the country’s most powerful men. Sunak and his wife also live in a state government residence that comes with his job as Chancellor of the Exchequer.
“Finally, we have someone who’s been here for eight years, raising their kids here, living…the permanents of this country,” Emily Thornberry, Labor spokeswoman for legal issues, told the BBC. Resident.”
“What is relevant is that it is among the 0.1% of the population who have chosen to affirmatively say that although they are living here, they are not living here permanently, and by taking advantage of that decision Not paying more tax,” she said.
Claiming non-domicile status is completely legal under UK tax rules that have been in place for over 200 years.
Under those rules, people who declare that they are not permanent residents of the UK can choose not to pay British income taxes on foreign income. They are still required to pay UK taxes on any income earned in the UK and any foreign income brought into the country.
So-called non-DOMs must pay an annual fee of £30,000 to continue enjoying these tax benefits after having lived in the UK for seven of the previous nine years. The fee increases to £60,000 after being a resident for 12 of the last 14 tax years. Tax benefits are not available after 15 years.
According to the company’s most recent annual report, Murthy holds a 0.91% stake in India-based Infosys, Bengaluru. That stake would have generated a dividend equivalent to more than £10.6 million ($13.8 million) in fiscal year 2020-21.
According to UK government records, Murthy is also a director of private equity firm Catamaran Ventures UK.
Sunak said he believed the status of non-domicile to have a bad reputation because some wealthy British people tried to use it to avoid paying taxes, but this is not the case with his wife.
“She has her own investments and is paying taxes in the UK,” he told the Sun. “She is 100% doing everything this country asks of her.”