Leave my wife out of it! Chancellor Rishi Sunak comes out fighting after revelations Akshata Murty chose to be non-dom for tax purposes ‘to save millions’ despite living in grace-and-favour Downing Street flat – saying ‘smearing her to get at me is AWFUL’
- Rishi Sunak was hit by a political backlash over the news that his heiress wife Akshata Murty’s non-dom status
- Although she pays full UK tax on earnings in this country, she pays ‘international tax’ on money earned abroad
- The Chancellor came out fighting last night, slamming his wife’s critics and accusing them of smearing her
- Allies have suggested that the Chancellor is the victim of a ‘political hit job’ with fingers pointed at No 10
Chancellor Rishi Sunak has hit out at critics and accused them of ‘smearing his wife to get at him’ after revelations about her non-dom status.
The Chancellor was hit by a political backlash over the news that his heiress wife Akshata Murty is domiciled in India for tax purposes, despite living in a taxpayer-funded flat in Downing Street.
Miss Murty, 42, was forced to make an embarrassing climbdown yesterday over initial suggestions that her non-dom status was an automatic product of her Indian citizenship. A spokesman acknowledged that she had taken a ‘decision’ to apply for non-dom status, for which she pays a flat fee of £30,000 a year.
Although she pays full UK tax on earnings in this country, her status means she pays only ‘international tax’ on money earned abroad provided it stays there, including dividends from her £713million stake in Indian tech giant Infosys, founded by her father.
Tax experts said last night the status could ultimately be worth as much as £300million to the Sunak family.
However, the Chancellor came out fighting last night, slamming his wife’s critics.
He told the Sun: ‘I’m an elected politician. So I know what I signed up for. It’s different when people are trying to attack you by coming at your family and particularly your wife. It’s unpleasant, especially when she hasn’t done anything wrong.’
He added: ‘Every single penny that she earns in the UK she pays UK taxes on, of course she does. And every penny that she earns internationally, for example in India, she would pay the full taxes on that.
‘What it comes down to is, my wife was born in India, raised in India. Her family home is in India, she obviously has a very close connection. She has investments and a career independent of me.
‘It wouldn’t be reasonable or fair to ask her to sever ties with her country because she happens to be married to me. She loves her country. Like I love mine, I would never dream of giving up my British citizenship. And I imagine most people wouldn’t.’
Meanwhile, an ally of the Chancellor blamed Mr Johnson’s camp for the leaks.
‘It’s all coming from Number 10,’ the source told The Telegraph. ‘Rishi’s the only credible show in town. Ever since he sat down from the Spring Statement, it’s been one thing after the other. I don’t think it’s in anyone’s interest other than the Prime Minister’s.’
One Tory MP said: ‘Number 10 have been gunning for him [Mr Sunak] for a while and undermining him with colleagues.’
Another ally told the Times: ‘It feels like there’s a full-time briefing operation against him. This is a hit job, a political hit job. Someone is trying to undermine his credibility.’
Rishi Sunak was hit by a political backlash over the news that his heiress wife Akshata Murty is domiciled in India for tax purposes
The Chancellor came out fighting last night, slamming his wife’s critics over the row
He also hit back at criticism of his wife’s family wealth, with her father’s company said to be worth around £3 billion.
Mr Sunak told the Sun: ‘These are attempted smears of my father-in-law, who I’m just enormously proud of.
‘That guy came from nothing and has created a world-class business that employs I think about a quarter of a million people around the world and changed the face of India.
‘If I achieved a tenth of what my father-in-law achieved in his life, I’d be a happy person. I’m really proud of what he’s achieved.
‘To attempt to smear him, to smear my wife to get at me is awful, right?’
Non-dom status has been a feature of the British tax system for centuries and there is no suggestion that Miss Murty has done anything wrong, let alone illegal. But the revelations are embarrassing for the Chancellor in a week when he has raised taxes for millions of working people.
They follow his poorly received mini-Budget, which was criticised for doing too little to tackle the cost of living.
Publicly, ministers stood by the Chancellor, with Business Secretary Kwasi Kwarteng describing attacks on his wife as ‘malicious’. But privately, some senior Tories said the affair raised serious questions about the Chancellor’s leadership ambitions.
One minister told the Daily Mail: ‘I think that people are surprised about it because you don’t expect the partner of a senior minister to have that sort of tax status.’
A Tory MP said there was ‘a degree of schadenfreude’ among allies of Boris Johnson over the Chancellor’s discomfort.
One former Cabinet minister said Mr Sunak was so weakened politically by recent setbacks that the Prime Minister could even sack him in a summer reshuffle.
Sunak old the Sun: ‘I’m an elected politician. So I know what I signed up for. It’s different when people are trying to attack you by coming at your family and particularly your wife. It’s unpleasant, especially when she hasn’t done anything wrong’
This is the extraordinary web of homes and businesses with links to Rishi Sunak and his wife Akshata, a heiress to a billion dollar fortune
‘Rishi went Awol when the PM was in trouble over parties,’ the source said. ‘Boris remembers things like that. I’m not sure I’d bet on him surviving a reshuffle right now.’
Mr Johnson dodged questions yesterday about the Chancellor and his wife, telling reporters: ‘I think it’s very important in politics, if you possibly can, to try to keep people’s families out of it.’
But a senior insider disputed claims there are serious tensions. ‘When you see them together in meetings they complement each other perfectly – they are like a cup and saucer. Of course there are disagreements but they sort them out amicably.’
Allies of the Chancellor, 41, yesterday reacted furiously to ‘unfair’ criticism of his wife, saying that she is not a public figure. One claimed that the information had been leaked by a Labour-supporting mole in Whitehall in an attempt to damage him.
A spokesman for Miss Murty was unwilling to say where she pays tax on her foreign earnings, but played down suggestions she could be using tax havens to minimise her liability, adding: ‘Since it is all above board there is no need for further details.’
It is understood that Mr Sunak declared his wife’s tax status when he became a minister in 2018 and the Treasury was also aware so that any potential conflicts could be managed.
Ms Murty, who is wealthier than the Queen as heiress to her father’s IT firm, is registered as non-domiciled for UK tax purposes, a legal way to avoid paying taxes in Britain on overseas income. The status is often used by the super-wealthy to save thousands or even millions of pounds in tax.
In a short statement Akshata, worth £200million more than a year ago, insisted she pays taxes on all UK income and said the set-up is required because she is an Indian citizen. But a number of tax and accounting experts have disputed this.
The revelations came on the very day that Mr Sunak asked working Britons and their employers to pay an extra 1.25p in every pound for National Insurance.
Akshata Murthy, whose father is one of India ‘s richest men, is facing scrutiny after it emerged she has kept non-dom status despite living in 11 Downing Street with Rishi Sunak and their children. They are pictured together last month
He became a household name after he married Akshata Murthy, the daughter of the billionaire founder of a staggeringly successful IT company. Pictured: The couple at their 2009 wedding with Murthy’s parents
Rishi Sunak’s poll ratings have been tumbling amid the raging cost-of-living crisis
The bulk of Akshata’s wealth comes from Infosys, the Bangalore-based IT firm founded by her now billionaire father. It is reported she holds a 0.91 per cent stake, around 39million shares, worth about £727million. Experts say this is an increase of more than £200million compared to a year ago, due to a jump in the share price during the pandemic.
But her non-dom status means she was not liable for tax on overseas earnings, including dividends from her father’s company that reportedly came to £11.6million last year. That sum could have meant paying £4.4million to HMRC, according to The Times.
Akshata also owns other investments, including a business that funnels investments through Mauritius. International Market Management is funding the expansion of franchise restaurants in India, including Jamie Oliver’s Italian chain that failed in the UK and US burger brand Wendy’s. This entirely legal structure allows them to reduce taxes paid in India.
The couple have at least four properties. A £1million flat in Kensington, a nearby mews house worth £7million and a £2million mansion in Rishi’s Yorkshire constituency, where he is nicknamed the ‘Maharaja of the Dales’. They also have a £5.5million penthouse in California, overlooking Santa Monica pier, which they use in the holidays.
ANDREW PIERCE: Gilded life of ‘billionaire couple’ with FOUR luxury properties… The timing of these revelations about Rishi Sunak and his wife really could not be worse
At meetings with his Treasury team, Rishi Sunak has been known to recite words of wisdom from his tycoon father-in-law, Narayana Murthy.
‘One of my favourite quotes of his is: ‘In God we trust, but everyone else needs to bring data to the table,’ the Chancellor has revealed. ‘It’s something I try to live by … I’m always interested in getting the data, getting the facts.’
Well, a growing chorus now believe it’s time he shared some ‘data’ and ‘facts’ of his own.
Specifically – how many millions in tax might his wife Akshata Murty have saved thanks to her coveted status as a ‘non-dom’ – domiciled abroad for tax purposes but resident in Britain, with all the advantages that life in these islands confers?
Thanks to her oh-so-attractive deal with HMRC, the Chancellor’s wife – unlike you and me – can earn money abroad free of the taxes set by her own husband at No 11.
The Chancellor himself is said to have four cars, including a high-spec Range Rover costing about £94,000, a top-of-the-range Lexus and BMW, both kept in California – and a more humble Volkswagen Golf, which was the only one he thought to mention in Parliament)
Capital gains, income, inheritance – you name it, if the cash is earned abroad, the Treasury doesn’t see a penny of tax on it, even though she has made her life here along with her public servant husband.
Yesterday, these extraordinary financial arrangements were met with fury. Sunak himself has hammered ordinary families with manifesto-breaking tax rises, hiking the overall tax burden to the highest since the far-Left government of Clement Attlee after the War – while simultaneously, it appears, standing by as his own family avoided perhaps millions in taxes themselves.
So let’s look at the numbers – and the remarkable lifestyle that being members of the tax-hating super-rich brings the Sunaks.
Miss Murty’s father founded computing firm Infosys in 1981 – and it’s now a £77billion giant. She owns a little under 1 per cent, a stake worth £713million. This sum dwarfs even the Queen’s fortune, which Forbes estimates at £325million. Miss Murty’s family also has a £900million venture with Amazon in India.
Not that Rishi is short of a bob or two. He made a fortune in the hedge fund industry before entering Parliament, and is reputedly worth £200million himself.
Thanks to her oh-so-attractive deal with HMRC, the Chancellor’s wife – unlike you and me – can earn money abroad free of the taxes set by her own husband at No 11.
The Sunaks have therefore been convincingly dubbed Westminster’s first ‘billionaire couple’: they may enjoy the largest family fortune of any Commons clan since Clive of India’s in the 18th Century.
Last year alone, the Chancellor’s wife enjoyed Infosys dividends totalling £11.6million. Her non-dom status means she avoided the UK’s 38.1 per cent foreign-dividend tax on these – a saving of £4.4million, although she might have paid some tax overseas.
As to her own business efforts, she is now the sole director of Catamaran Ventures UK, which invests in startups, and which she launched with Rishi in 2013 (he transferred his shares to her before becoming an MP in 2015). Her father runs Catamaran’s Indian arm.
Alas, not all Catamaran’s projects have been a success. A private members club, Lava Mayfair Club Ltd, collapsed last year owing almost £44million to creditors, including £374,000 to HMRC. Another venture, education firm Mrs Wordsmith, went into administration last year owing £16.3million – after receiving a £1.3million loan from the Government’s Future Fund.
Miss Murty’s eponymous fashion label, Akshata Designs, folded ignominiously in Britain after three years. She is also a director of a gym chain as well as New & Lingwood, the outfitter that supplies the tailcoats worn by Etonians and which also sells £2,750 silk dressing gowns. (It’s not known to what extent she was personally involved in these businesses.)
Her spokesman had earlier pointed out that India does not allow its citizens to hold dual citizenship, claiming: ‘She has always … paid UK tax on all her UK income.’
However, tax experts raised eyebrows at this, suggesting that non-dom status is a ‘choice’. Professor Richard Murphy, co-founder of the Tax Justice Network, added: ‘Domicile has nothing to do with a person’s nationality.’
Meanwhile, top tax lawyer Dan Neidle suggested that, even if Miss Murty’s fortune is valued at only £500million, her non-dom status could one day save her estate inheritance taxes of £200million.
The timing of these revelations really could not be worse.
Tory MPs, I’m told, were aghast when news of Miss Murty’s tax deal emerged on Wednesday, when a grinning Rishi had stood beside the Prime Minister to defend a punitive national insurance hike.
At meetings with his Treasury team, Rishi Sunak has been known to recite words of wisdom from his tycoon father-in-law, Narayana Murthy. ‘One of my favourite quotes of his is: ‘In God we trust, but everyone else needs to bring data to the table,’ the Chancellor has revealed
Not that the Sunaks are likely to worry much about the cost of living. Their property portfolio alone is thought to be worth some £14million.
This includes their main, five-bedroom London house, valued at £7million and situated on an exquisite Kensington mews.
They bought it – in cash – for £4.5million in 2010. Sprawling across four floors, it includes four bathrooms, and includes access to an exclusive private garden. They also own a £1.5million Georgian mansion set in 12 acres in Sunak’s constituency of Richmond, North Yorkshire. Each summer, the Sunaks invite the villagers round to an opulent garden party.
Staff in uniform pour champagne and serve canapes, as guests mingle alongside the ornamental lake with its boathouse and wooded island. No wonder some locals have nicknamed the Chancellor ‘the Maharaja of the Dales’.
Then there is their dazzling penthouse apartment – listed under Miss Murty’s name – in Santa Monica, California. Valued at £5.5million, it has sweeping views of the Pacific, while the building boasts a 24/7 concierge, ‘fitness centre’ and ‘pet spa’ where ‘furry companions can get pampered’. Oh, and there’s a £1million flat in Kensington’s Old Brompton Road.
Sunak – who was educated at Winchester College, where fees are now £43,000 per year – met his future wife at Stanford University in California. (This week, the couple were reported to have donated at least £100,000 to the public school in Hampshire.)
They married in 2009 in a lavish two-day spectacular in Bangalore, attended by tycoons and cricketing royalty. In an open letter to his daughter, published in a book in India in 2016, Mr Murty described how he tried to teach her the virtue of moderation.
‘There was an instance in Bangalore,’ he reminisced, ‘when you were selected for a school drama for which you were required to wear a special dress. It was in the mid-1980s, Infosys had just begun its operations and we did not have enough money to spend on non-basic goods.
‘Your mother explained to you that we would not be able to buy the dress and that you would have to drop out of the performance … we knew you learnt something important from that: the importance of austerity.’
Rishi doesn’t seem to have got the memo. Only last month, as the cost of living crisis escalated, he was pictured strolling through SW1 wearing a £335 pair of white leather trainers.
Rishi is evidently fond of trendy luxury goods. When he was working on emergency financial measures during the pandemic in 2020, he released pictures of himself in his office alongside a £180 ‘bluetooth coffee mug’ featuring a ‘charging coaster’, which keeps his drinks at his preferred temperature. (Some suggested the only ‘mug’ is the person who’d buy such a thing.)
The public was willing to forgive such apparent signs of being out-of-touch as long as the Chancellor was shovelling ‘free’ money at them during the pandemic in furlough payments, Covid business loans and the rest. But now the bill for his largesse has landed – and the electorate’s patience has worn thin.
After last month’s badly received Spring Statement, in which he stuck to his national insurance hike, Sunak arranged a photo-op filling a car with petrol to publicise the 5p cut in fuel duty.
It was a disaster. Sunak appeared to hold his bank card to the barcode scanner and filled up a Kia car he had borrowed for the occasion from a supermarket worker.
The Chancellor himself is said to have four cars, including a high-spec Range Rover costing about £94,000, a top-of-the-range Lexus and BMW, both kept in California – and a more humble Volkswagen Golf, which was the only one he thought to mention in Parliament.)
All this has inevitably led some to wonder: can the Chancellor possibly identify with the concerns of struggling voters?
A recent YouGov poll found that more than half of Britons now have an unfavourable opinion of him, compared with 28 per cent who view him in a positive light.
One Tory source said: ‘He was the golden boy when he was giving away public money during the lockdown, but the gloss has well and truly worn off. Revelations about his wife’s non-dom status are a PR calamity for him – and for us as a government.’
Will he come clean about the details of these arrangements? Or does his fondness for ‘facts’ and ‘data’ not always apply when it comes to his own affairs?
Additional reporting Calum Muirhead
Source: Read Full Article