Chancellor Rishi Sunak and his allies have hit out at “unpleasant smears” as he come under scrutiny over his wife’s tax-reducing non-domiciled status, while No 10 denied being behind the leaks.
Energy minister Greg Hands claimed Akshata Murty’s non-dom tax arrangements were “not unusual” and aid the commentary around Mr Sunak’s wife was “a little bit unpleasant, to be frank”.
Asked about Ms Murty’s decision to choose an exemption from paying tax in the UK on foreign income, Mr Hands told LBC: “That is not unusual for somebody who is a foreign national.”
The minister added: “She is an Indian national and her affairs in that regard are not unusual for somebody who is not domiciled here, but is a foreign national.”
Ms Murty, who married the chancellor in 2009, has confirmed she paid £30,000 to hold non-dom status after The Independent revealed the arrangement earlier this week.
Mr Sunak has blamed Labour for the tax details emerging, but his allies have told newspapers that they suspect No 10 of trying to undermine the chancellor – who has been seen as a favourite to succeed Boris Johnson in any leadership challenge.
A No 10 spokeswoman denied the PM’s office was sharing any details, saying: “It is categorically untrue that No 10 is behind the briefings. The prime minister and chancellor are united.”
A Treasury source said on Friday: “Neither Rishi nor anyone in his team believes this is coming from No 10.”
Meanwhile, in an interview with The SunMr Sunak said: “To smear my wife to get at me is awful.” Asked if he thought his family were victims of a Labour smear campaign, Mr Sunak replied: “Yeah.”
But a Labour source responded: “The chancellor would do better to look a little closer to home. It’s clear that No 10 are the ones briefing against Rishi Sunak.”
Sir Keir Starmer said Mr Sunak and his family will probably “be alright” in the cost-of-living crisis following revelations about the chancellor’s wife’s tax status.
Speaking at the launch of his party’s London local election campaign: “I think as we’ve seen in the last few days, I think the Sunaks will probably be alright in this cost-of-living crisis.”
Emily Thornberry, Labour’s shadow attorney general, told BBC Radio 4’s Today programme said Ms Murty was “aspiring to be the wife of the next prime minister, and yet she says that she isn’t a permanent resident of this country.”
The Labour frontbencher dismissed claims of a Labour smear as “nonsense”.
Ms Thornberry also pointed to the ministerial code, which mentions that the financial status of ministers’ spouses is relevant because “there can be a conflict of interest” and suggesting Mr Sunak “didn’t declare it properly”.
But the Treasury denied the suggestion that the code had been breached. “The chancellor provided a full list of all relevant interests when he first became a minister in 2018, as required by the ministerial code.
“The Independent Adviser on Ministers’ Interests has confirmed that they are completely satisfied with the steps the chancellor has taken to meet the requirements of the Code.”
The Sunaks were also facing questions over past arrangements in the US, where they met while he was studying at Stanford University and where they own a home, in Santa Monica, California.
Sky News reported that the couple held green cards permitting US residence until more than a year into his chancellorship, before giving them up.
The US inland revenue says anyone who has a green card is treated as a lawful permanent resident and is considered a “US tax resident for US income tax purposes”.
A source close to Mr Sunak said “they do not hold green cards” now, but did not say when they were given up or whether he paid US tax while chancellor.
Ms Murty is reported to hold a 0.91 per cent stake in Infosys, an IT giant founded by her father, and has received £11.6m in dividends from the Indian firm in the past year.
Non-dom status means she would not have to pay UK tax at a rate of 39.35 per cent on dividends. India sets the rate for non-residents at 20 per cent, but this can fall to 10 per cent for those who are eligible to benefit from the UK’s tax treaty with India.
Public records also show Infosys has received more than £50m in UK public sector contracts since 2015.
Senior Conservative MP Tobias Ellwood has said non-dom rules are outdated and should be reviewed. “In my view, they are out of date, they do need to be reviewed.”
Ms Thornberry suggested that Mr Sunak could not be an impartial player in any discussion of reforms to non-dom tax rules because of the “clear conflict of interest” presented by his wife’s tax affairs.
“It may be that they may have had discussions in the Treasury about updating these rules, making sure they’re more relevant,” she said on Sky News.
The Labour frontbencher added: “Would he have been involved in those discussions? He shouldn’t have been and he should have declared that he had a conflict of interest.”