Rishi Sunak has defended his wife over her tax-reducing non-domiciled status as reports emerged that his allies had blamed No10 for briefing against him to journalists.
The Chancellor said his spouse Akshata Murthy – estimated to have saved up to £ 20million through the status – had done nothing wrong in choosing a financial arrangement that means she is not legally obliged to pay tax in Britain on foreign income.
Sunak has blamed Labor for the “awful” smears, but the Telegraph reported that unnamed allies of his claimed the Prime Minister’s office was behind the leaks – an allegation No 10 and No 11 strongly denied.
A No 10 spokeswoman told the PA news agency: “It is categorically untrue that No 10 is behind the briefings. The Prime Minister and Chancellor are united. ”
Mr Sunak told The Sun newspaper Ms Murthy was entitled to use the “non-dom” arrangement as she is an Indian citizen and plans to move back to her home country to care for her parents.
The fashion-designer daughter of a billionaire, she married the Chancellor in 2009 before he became an MP.
She is reported to hold a 0.91% stake in Infosys, an IT business founded by her father, with The Guardian reporting her share is worth £ 11.5million per year ‘.
The paper also reported Ms Murthy had potentially avoided up to £ 20 million in UK tax by being non-domiciled.
Because Ms Murthy was born in India and her father is also from the country, UK Government rules allow her to list India, rather than the UK, as her permanent residence, meaning different tax rules on foreign earnings apply.
The Chancellor said it was “unpleasant” to read attacks on his wife “especially when she has not done anything wrong”.
“She has not broken any rules. She’s followed the letter of the law, ”Mr Sunak told The Sun.
The Chancellor said his partner “pays full UK tax on every penny that she earns here in the same way that she pays full international tax on every penny that she earns internationally”.
Asked during the interview if he thought his family were victims of a “Labor smear campaign”, Mr Sunak said he did.
But Labor hit back, with a party source telling PA: “The Chancellor would do better to look a little closer to home.
“It’s clear that No 10 is the ones briefing against Rishi Sunak and, after his failure to tackle the cost-of-living crisis, you can understand why.”
Opposition leader Sir Keir Starmer said on Thursday that Mr Sunak could be guilty of “breathtaking hypocrisy” if his wife was reducing her own tax bill as the No 11 incumbent increases national insurance for millions of Britons.
Boris Johnson sidestepped questions on Ms Murhty’s tax situation, saying it is important to keep families out of politics “if you possibly can” when asked by broadcasters for his opinion.
Ms Murthy confirmed her “non-dom” status after The Independent website first reported the arrangement on Wednesday – the day the 1.25 percentage point rise in national insurance took effect.
It means her permanent home is considered to be outside the UK despite the Sunaks living in Downing Street.
Ms Murthy pays an annual levy of £ 30,000 to the UK Government to keep her non-dom status, her spokeswoman confirmed.
The status will automatically cease once she has resided in Britain for 15 years, which will happen in 2028.
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