Labour has called for clarity over why Rishi Sunak’s wife, Akshata Murty, uses non-domicile status, as Keir Starmer said it would be “breathtaking hypocrisy” if she had been reducing her tax liabilities while the chancellor was raising taxes on others.
Murty receives about £11.5m in annual dividends from a stake in her family’s IT business empire, Infosys, which is headquartered in Bengaluru, India, and listed on the Indian and New York stock exchanges.
Under UK tax laws, Murty’s status as a non-dom means she does not have to pay tax on dividend payments from overseas companies. As of Wednesday, UK resident taxpayers in the highest income band pay a 39.35% tax on dividend payouts.
After her status was revealed by the Independent a spokesperson for Murty said that because she was a citizen of India, which does not allow Indians to hold the citizenship of another country simultaneously, she “is treated as non-domiciled for UK tax purposes”. They added: “She has always and will continue to pay UK taxes on all her UK income.”
However, tax experts have said non-dom status is not automatic but a choice.
Prof Richard Murphy, a Sheffield University academic who co-founded the Tax Justice Network, said: “Domicile has nothing to do with a person’s nationality. In other words, the claims made in the statement issued by Ms Murty are wrong, and as evidence, just because a person has Indian citizenship will never automatically grant them non-dom status in the UK.”
The Labour MP Chris Bryant said the statement needed to be clarified: “This is just wrong. Non-dom status is not automatic and the Treasury needs to urgently clarify this inaccurate statement.
“After shutting down legitimate questions about Infosys and its operations in Russia last week, it’s time for Rishi Sunak to come clean.”
Starmer said Sunak “has very, very serious questions to answer”.
The Labour leader told Sky News that Sunak had repeatedly raised taxes: “He says all of this is necessary, there’s no option. If it now transpires that his wife has been using schemes to reduce her own tax, then I’m afraid that is breathtaking hypocrisy.
“We need complete transparency on this, so that we can all understand what schemes she may have been using to reduce her own tax.”
Earlier, the business secretary, Kwasi Kwarteng, insisted that the chancellor and his his wife had been “incredibly transparent” about the arrangement, but was unable to say whether she paid tax on foreign earnings in India or another jurisdiction, such as the Cayman Islands.
Speaking to BBC Radio 4’s Today programme, he said: “She’s an Indian citizen. And so she, as you say, pays tax here on UK income, but pays tax abroad on foreign income.”
But asked where she paid tax abroad – in India or elsewhere such as the Cayman Islands – Kwarteng said: “I don’t know anything about her tax affairs.
“What I do know is that she’s been very clear about the fact that she’s an Indian citizen. Once she’s lived here for 15 years, the non-domicile status falls away. So that will happen in a few years. I don’t know when.
“And she’s been very transparent about that. The chancellor has been incredibly transparent in the declaration of interests when he became a minister.
“The Treasury, the department which he works in, knows about all those affairs. And there is a measure of transparency and he’s been very honest about that. And I think, as far as I’m concerned, that’s good enough for me. And I think we should move on from that story.”
Earlier, Kwarteng told Times Radio that non-domicile status had existed in the UK “for more than 200 years”.
He said: “That’s something that’s been well established … I think there’s a lot of malicious attacks on someone who, after all, is a private citizen and is not a politician.”
A representative for Murty was contacted for comment.