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UK Chancellor’s Wife in Foreign Citizen Tax Row

Tulip Siddiq, Treasury spokeswoman in the opposition Labour Party, said Sunak should say whether he had benefitted from his wife’s tax status

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Rishi Sunak and Akshata Murthy
Akshata Murthy said her previous tax arrangements were "entirely legal", and that she would continue to claim India, not Britain, as her domicile. Photo: AFP

 

The wife of British Chancellor of the Exchequer Rishi Sunak is treated as ‘non-domiciled’ for UK tax purposes but pays taxes in Britain on local income, her spokeswoman said on Wednesday, as her status sparked uproar over tax rises in her adopted home.

Akshata Murthy is the daughter of Narayana Murthy, the billionaire co-founder of IT services company Infosys, and she owns about 0.93% of the company. The tax status means she would not pay taxes in Britain on dividends from the Indian business.

The news, which featured prominently in Britain’s newspapers on Thursday, comes as the government is putting up taxes in for millions of people.

Tulip Siddiq, Treasury spokeswoman in the opposition Labour Party, said Sunak should say whether he had benefitted from his wife’s tax status.

Murthy’s spokeswoman said, as a citizen of India, Murthy was treated under British law as non-domiciled for UK tax purposes because India does not allow its citizens to hold the citizenship of another country simultaneously.

Sunak, chancellor since February 2020 just when the country entered the Covid-19 pandemic, is now facing some of the toughest economic conditions in decades, with inflation soaring and living standards set to drop to levels last seen in the 1950s.

To help fund the rebuilding of the country’s national health service and public finances, he has increased the tax take to the highest level since the 1940s.

“Akshata Murty is a citizen of India, the country of her birth and parent’s home,” the spokeswoman said in a statement.

“India does not allow its citizens to hold the citizenship of another country simultaneously. She has always and will continue to pay UK taxes on all her UK income.”

A person familiar with the situation said Sunak had declared his wife’s status to the government when he became a minister and the Treasury department was also informed, adding that Murthy pays foreign taxes on her foreign income.

 

  • Reuters, with additional editing by George Russell

 

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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

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