Rishi Sunak under tax fire over wife Akshata Murthy's non-domicile status

Published on Apr 07, 2022 10:29 AM IST

The revelation of Akshata Murthy's tax status comes as Rishi Sunak's approval rating has been dropping ever since he increased the tax burden on public. 

Rishi Sunak earlier faced question over Infosys still operating in Russia while he had been asking UK companies to stop business in and with Russia. 
Rishi Sunak earlier faced question over Infosys still operating in Russia while he had been asking UK companies to stop business in and with Russia. 
By | Written by Poulomi Ghosh

UK exchequer Chancellor Rishi Sunak, the son-in-law of Narayana Murthy, has once again come under fire as it has been revealed that his wife Akshata Murthy has a non-domicile status for UK tax purposes which means that Akshata Murthy does not have to pay tax to the UK on income outside Britain. Her spokesperson said she pays all the tax that is legally required in the UK. But the revelation leaves room for allegations that her family which includes Rishi Sunak may have been benefitting from the tax reduction schemes.

“The chancellor has imposed tax hike after tax hike on the British people. It is staggering that – at the same time – his family may have been benefiting from tax reduction schemes. This is yet another example of the Tories thinking it is one rule for them, another for everyone else," Tulip Siddiq, the shadow economic secretary to the treasury, said.

UK minister Rishi Sunak invokes Will Smith on criticism of wife Akshata Murthy

“Rishi Sunak must now urgently explain how much he and his family have saved on their own tax bill at the same time he was putting taxes up for millions of working families and choosing to leave them £2,620 a year worse off.”

Akshata Murthy is the daughter of Narayana Murthy, the co-founder of Infosys, and owns around 0.93% of the company. Earlier, Rishi Sunak faced questions over Infosys still operating in Russia, while he was calling for UK businesses to rethink their business is Moscow. At that time, Rishi Sunak said he had no role in Infosys and its decisions.

What does the non-domicile status mean?

Akshata Murthy is an Indian but India does not allow its citizens to hold the citizenship of another country simultaneously. Hence, under British law, she is treated as a non-domicile for UK tax purposes. "She has always and will continue to pay UK taxes on all her UK income," her spokesperson said.

Foreign tax on foreign income

According to an unnamed source, Rishi Sunak does not stand a chance of reaping the dividend of his wife's tax status as he had declared his wife's status to the government when he became a minister. Akshata Murthy pays foreign taxes on her foreign income, though she is not paying taxes to the UK government for her foreign income, the source cited by Reuters said.

It was earlier claimed that Akshata Murthy is only one of the thousands of shareholders of Infosys and has no involvement in the operational decisions of the public company.

UK media reported that the revelation of Akshata Murthy's tax status could not have come at a worse time as Rishi Sunak's approval rating has been plummeting since he has raised the tax burden on people.

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