Tax experts have heavily criticised the Chancellor’s wife. They have attacked what they believe to be a ‘disingenuous’ claim of his wife to have non-dom status, or non-domiciled status. Akshata Murty has been married to the Chancellor since 2009. She is part-owner of an Indian company founded by her father, Narayana Murty. The company, Infosys, is a technology company reported to be valued in excess of £500 million. Her father is known as the ‘Bill Gates of India’.
What is Non-Dom Status?
It is a tax status that has been around since the French Revolution. It enables a person who was born in another country, or if their parent is from another country, to only tax in the UK, purely on their UK income. It is used by the top 1% of earners in the UK
A Non-Dom, or Non-Domiciled person is a UK resident who states their permanent home, or domicile, is outside of the UK. Furthermore, it allows a person who was born in another country, or if their parent is from another country to claim the status. Essentially, if a person who lives in Britain has a primary connection abroad, they can claim the status.
It can allow affluent foreign immigrants to live in the UK and pay very little in UK tax if their income is made abroad. The tax system has been known to be abused by foreigners and British citizens alike, if they wish to avoid paying tax. The fact that they abode in the UK and are UK tax residents, means it can sometimes be more straightforward to arrange their affairs and pay little, if any tax. They can also benefit from lower tax rates overseas.
Non-Domiciled Status
There are estimated to be over 75,000 non-doms in the UK, most of which are foreign nationals. It is said 1 in 5 bankers earning in excess of £125,000 a year in the UK have claimed non-domiciled tax status in the past.
Permanent non-dom status ended in 2017. A person can only be classed as non-domiciled for up to 15 years while living in Britain.
Akshata Murty
Murty was born in in the southern Indian state of Karnataka in 1980. A year later her father founded Infosys, soon to become one of the biggest companies in India. Mr Murty created global IT outsourcing services from India. Forbes states his net worth is £3.45 billion.
She met Sunak in 2005 at Stanford where she was studying for an MBA. They married four years later in Bangalore. She founded a fashion brand called Akshata, which was later featured in Vogue. Akshata is also Director of the Catamaran Ventures UK, started by her father in 2010. Rishi was a co-owner but transferred his shares prior to being elected as the Tory MP for Richmond in 2015.
The Chancellor’s wife has a 0.91% stake in the tech empire. This puts her estimated net worth over £500 million, which is above the Queen’s. She has been claiming non-dom status now for a number of years. Sunak’s critics state this a clear conflict of interest over his wife’s non-dom status.
Soon after the news went public, on 8th April Ms Murty announced she would now be paying tax on her entire worldwide income.
If you would like advice on your tax affairs please contact us. In particular, if you would like advice on schemes that avoid tax in any way call us on 0800 471 4546.
