Labour urges Sunak to be “transparent without delay” on wife non-dom status

Labour shadow minister James Murray has urged Rishi Sunak to be “transparent” about his family’s financial affairs and his wife’s non-domicile status “without delay” following reports that she is benefiting from a tax-saving arrangement.

The Independent revealed on Wednesday that the Chancellor’s wife Akshata Murty, daughter of Indian IT billionaire Narayana Murthy, has claimed non-dom status in the UK and has continued to do so throughout Sunak’s time in the job.

Labour’s Shadow Financial Secretary to the Treasury wrote to Sunak this afternoon, telling the Chancellor: “For our tax system to be effective and trusted, it needs to be built on fairness and consistency.

“As Chancellor, it is crucial you both follow the rules and lead by example. Any impression that there is one set of rules favouring a few, and another for everyone else, threatens the integrity of tax policy in our country.

“It appears Ms Murthy has used her ‘non-domicile’ tax status to reduce the amount of tax she pays on her overseas earnings. In the public interest, I would urge you to be transparent about the details of this matter without delay.”

The shadow minister argued that Murthy’s non-domicile status is of public interest for “two key reasons”: that Sunak may have personally benefited from the arrangement; and that he is in charge of tax policy through his role as Chancellor and “any threat to its integrity must be removed”.

Murray highlighted that should the Chancellor have benefitted from his partners’ financial arrangement, the ministerial code requires him to declare an interest, and urged Sunak to “answer the following questions to help establish the facts”:

• “How much have you benefited from Ms Murthy’s tax status as a ‘non-dom’?
• “Has Ms Murthy ever claimed the remittance basis?
• “Do you accept that claiming the remittance basis was an active choice by Ms Murthy, and not (as her spokesperson claimed yesterday) something that followed automatically from her citizenship?
• “What is Ms Murthy’s claimed domicile?
• “On what basis is it not the UK, given her life suggests she intends to permanently remain in the UK?
• “For how long has Ms Murthy been claiming the remittance basis? Companies House filings say Ms Murthy has been living in the UK since at least 2013.
• “How much tax has been saved by claiming the remittance basis?
• “Where are all of Ms Murthy’s non-UK income and gains fully taxed?
• “Does Ms Murthy hold investments/property through trusts or companies in offshore jurisdictions?
• “When Ms Murthy hits 15 years of being in the UK, she will cease to be entitled to claim the remittance basis. Often the wealthy avoid the resultant tax by putting their assets into trusts before the expiry of the 15 years. Will she commit not to do that?
• “Do you as Chancellor support the claim of Ms Murthy’s spokesperson that her Indian citizenship means she must be treated as non-domiciled for UK tax purposes?
• “What measures have you as Chancellor put in place to ensure that you are not involved in Treasury discussions around potential amendments to the non-domicile status rules?”

Murthy is the daughter of Narayana Murthy, who founded the global IT services company Infosys. She owns slightly less than 1% of Infosys, a shareholding worth more than £500m, as well as having interests in several companies in the UK.

Responding to the reports, Murthy’s spokesperson said she is an Indian citizen and that the country does not recognise dual citizenship, adding: “So, according to British law, Ms Murty is treated as non-domiciled for UK tax purposes.”

Holding non-dom status means that an individual is recognised by HMRC as tax resident in the UK but does not have to pay UK tax on income and capital gains earned overseas. This exempts money earned on company stocks or from selling a second home, unless they bring their money into the UK or deposits it in a UK bank.

Below is the full text of the letter from James Murray to Rishi Sunak:

Dear Chancellor,

This week you have increased taxes on working people, the self-employed and employers in Britain, while refusing to ask for any greater contribution from those receiving incomes from many other sources.

Labour finds it profoundly unfair that the people who keep our country moving are paying £1,060 more in tax, while your government is choosing to shield the very wealthiest in society.

For our tax system to be effective and trusted, it needs to be built on fairness and consistency.

As Chancellor it is crucial you both follow the rules and lead by example. Any impression that there is one set of rules favouring a few, and another for everyone else, threatens the integrity of tax policy in our country.

It appears Ms Murthy has used her ‘non-domicile’ tax status to reduce the amount of tax she pays on her overseas earnings. In the public interest, I would urge you to be transparent about the details of this matter without delay.

Clarity on these reports is crucial and in the vital public interest for two key reasons.

One is that you may have personally benefited directly from Ms Murthy’s non-domiciled status. As Chancellor, it’s crucial that your interests related to this are properly declared and transparent, as the Ministerial Code requires.

The other is that you are in charge of creating tax policy for our country, and any threat to its integrity must be removed.

With this is mind, I would urge you to answer the following questions to help establish the facts:

1. How much have you benefited from Ms Murthy’s tax status as a ‘non-dom’?
2. Has Ms Murthy ever claimed the remittance basis?
3. Do you accept that claiming the remittance basis was an active choice by Ms Murthy, and not (as her spokesperson claimed yesterday) something that followed automatically from her citizenship?
4. What is Ms Murthy’s claimed domicile?
5. On what basis is it not the UK, given her life suggests she intends to permanently remain in the UK?
6. For how long has Ms Murthy been claiming the remittance basis? Companies House filings say Ms Murthy has been living in the UK since at least 2013.
7. How much tax has been saved by claiming the remittance basis?
8. Where are all of Ms Murthy’s non-UK income and gains fully taxed?
9. Does Ms Murthy hold investments/property through trusts or companies in offshore jurisdictions?
10. When Ms Murthy hits 15 years of being in the UK, she will cease to be entitled to claim the remittance basis. Often the wealthy avoid the resultant tax by putting their assets into trusts before the expiry of the 15 years. Will she commit not to do that?
11. Do you as Chancellor support the claim of Ms Murthy’s spokesperson that her Indian citizenship means she must be treated as non-domiciled for UK tax purposes?
12. What measures have you as Chancellor put in place to ensure that you are not involved in Treasury discussions around potential amendments to the non-domicile status rules?

All in public office should be guided by the seven principles of public life (‘the Nolan Principles’) of selflessness, integrity, objectivity, accountability, openness, honesty and leadership.

It is therefore important to provide these answers immediately and openly given the wide public interest in this matter.

Yours sincerely,

James Murray
Shadow Financial Secretary to the Treasury