A cabinet minister has defended the chancellor’s wife for having non-domicile status in the UK, allowing her to avoid paying millions of pounds in tax on foreign earnings, and hit back at “malicious attacks” against her.
The business secretary, Kwasi Kwarteng, insisted Rishi Sunak and his wife, Akshata Murthy, had been “incredibly transparent” about the arrangement and added that people should “move on from that story”.
But Kwarteng was unable to say whether Murthy paid tax on foreign earnings in India, of which she is a citizen, or another jurisdiction, such as the Cayman Islands.
Murthy receives about £11.5m in annual dividends from a stake in her family’s IT business empire: Infosys.
Under UK tax laws, her status as a non-dom means she would not have had to pay tax on the dividend payment from overseas companies. Infosys is headquartered in Bengaluru, India, and listed on the Indian and New York stock exchanges. UK resident taxpayers pay a 38.1% tax on dividend payouts.
A spokesperson for Murthy said that because she was a citizen of India, which did not allow its citizens 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.”
After Murthy had lived in the UK for 15 years, her non-dom status would fall away, Kwarteng said.
Murthy moved to the country in 2015, six years after marrying Sunak. The pair met while studying for a masters in business administration at Stanford University in California.
Kwarteng said Murthy had been “very clear” about her non-dom status.
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.”
Murthy had previously faced accusations that she was collecting “blood money” dividends from Infosys’s continued operation in Russia despite the invasion of Ukraine. Following mounting pressure, the company last week announced that it was “urgently” closing its office in Russia.
Sunak, who has repeatedly called on British companies to pull out of Russia in order to “inflict maximum economic pain” on Putin’s regime, has so far refused to comment on his wife’s 0.93% stake in Infosys.