Downing St dispute

Sunak drawn into new tax row as wife forfeits rights

Rishi Sunak: tax haven links

Embattled Chancellor Rishi Sunak has confirmed reports that he held a US ‘green card’ residency permit until October last year.

It was reported that he filed US tax returns during more than six years as an MP and almost four years as a minister.

His green card status means he was classed as a ‘permanent resident’ of the US while living in Downing Street.

The revelation emerged as Mr Sunak’s India-born wife Akshata Murty agreed to pay UK tax on her global fortune to avoid damaging his political career.

Murty will retain her non-domiciled status and will continue to benefit from India’s policy of not taxing inheritance. But the heiress to her father’s tech company fortune said she would forfeit her right to pay only ‘international tax’ on her foreign fortune.

But in a further twist, it was also reported that Mr Sunak was listed as a beneficiary of tax haven trusts in the British Virgin Isles and Cayman Islands. 

The Independent website said it had been shown documents ‘linked to Miss Murty, her family and companies linked to their businesses… In a number of them, Mr Sunak was listed as a beneficiary.’ 

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A Treasury source said Mr Sunak, his wife and her wealthy family were not aware of any trusts naming the Chancellor as a beneficiary.  

Sources said he had paid both UK and US tax on his British income while holding the green card.

The Chancellor has claimed that he is the subject of a deliberate smear campaign about his wife’s non-domicile tax status.

Boris Johnson rejected claims from the chancellor’s allies that details about Murty’s tax affairs had been leaked by someone in No 10 as a way of diverting negative publicity from the Prime Minister. “If there are such briefings they are certainly not coming from us in No 10,” he said at a press conference.

Ms Murty said her tax arrangements were “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,” she said.

“For this reason, I will no longer be claiming the remittance basis for tax. This means I will now pay UK tax on an arising basis on all my worldwide income, including dividends and capital gains.”

Last year she was due a dividend worth £11.6 million on her £730m stake in Indian tech giant Infosys, which was founded by her father.

Without her non-dom status, she would have had to pay £4.4m tax on this in the UK.

Commenting on the allegations around the tax haven trusts,. Pat McFadden, Labour’s Shadow Chief Secretary to the Treasury, said: “This is extremely serious. We need urgent answers from the Chancellor as to why he has been linked to a tax haven.

“People are extremely worried about the high taxes hitting them in the midst of a cost of living crisis.

“We already knew the Chancellor had chosen to pile that financial pain onto households this year to fund a pre-election tax promise from the Tories.

“Now we need full transparency about this and the other stories about the Chancellor emerging over the past 24 hours.”

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