LONDON — Boris Johnson’s most senior Cabinet minister and presumed leadership contender Rishi Sunak has hit political trouble after it was reported his wife did not pay tax on income earned overseas and also that he held a U.S. green card for almost two years after becoming chancellor.
Chancellor Sunak has faced a series of questions about his tax and residency arrangements and those used by his wife Akshata Murty after the Independent reported Murty has non-domiciled status. This means she pays a fee of £30,000 a year in order to register as a “non dom” and does not pay tax on earnings from outside the U.K., an arrangement that the Guardian estimated may have saved her £20 million in tax.
“Non dom” status has long been controversial in British public life, particularly since some of those who declare they are domiciled abroad, like Murty, spend most of their time in the U.K. The revelation raised eyebrows because of Sunak’s role setting taxes across the country and because his wife’s status remained undeclared for more than two years since he took over at the Treasury in February 2020.
Murty issued a statement Friday evening in which she announced she would no longer claim this status and therefore would pay U.K. tax on all of her income. The statement said the arrangement was “entirely legal” but added: “It has become clear that many do not feel it is compatible with my husband’s role as chancellor. I understand and appreciate the British sense of fairness and I do not wish my tax status to be a distraction for my husband or to affect my family.”
Sunak and Murty represent the ultimate British-Indian power couple. Sunak ascended to high office after attending an exclusive public school, Oxford and Stanford universities and working as a hedge fund manager, while Murty is part of one of India’s wealthiest families.
She earns money from shares in the business founded by her father, software company Infosys, which is estimated to be worth £3.5 billion.
Labour leader Keir Starmer said it would be “breathtaking hypocrisy” if she was reducing her bill while the chancellor raised taxes for the British public.
Sunak lashed out at press coverage of his wife, accusing journalists of “unpleasant smears,” adding: “I would hope that most fair-minded people would understand — though I appreciate that it is a confusing situation that she is from another country.”
Sky News later reported Sunak held a U.S. green card after becoming the U.K.’s finance minister, which usually requires the holder to be a permanent resident of the U.S.
Confirming the reports Friday, the chancellor’s spokeswoman said: “Rishi Sunak had a green card when he lived and worked in the U.S. Under U.S. law, you are not presumed to be a U.S. resident just by dint of holding a green card.”
She said he “followed all guidance and continued to file U.S. tax returns, but specifically as a non-resident, in full compliance with the law.”
Sunak gave up his green card after his first trip to the U.S. as chancellor after discussing it with the authorities, according to his spokeswoman.
Johnson was quizzed about Sunak’s woes as he held a press conference in Downing Street with German Chancellor Olaf Scholz on Friday. He told reporters he had not been aware of Murty’s “non dom” status before this week and denied leaking the story, as had been suggested in some newspapers.
The chancellor is often touted as a potential successor to Johnson after gaining popularity through a package of measures designed to help the country through COVID.
However, he has experienced the roughest few weeks of his time in office after his recent mini-budget was criticized for failing to do enough to help those hit by the cost of living crisis at the same time as raising taxes.
English (US) ·