'Keep families out of it' Boris says amid row over non-dom status of Sunak's wife

7 April 2022, 10:38 | Updated: 7 April 2022, 13:56

Boris Johnson has suggested it is wrong to probe Rishi Sunak's wife's non-dom tax status because families should be kept out of politics.

Amid growing pressure for Akshata Murty to explain her claim that she has non-dom status because she is an Indian citizen, the Prime Minister refused to comment on the controversy.

He said: “I think it is very important in politics, if you possibly can, to try and keep people’s families out of it.”

Labour leader Keir Starmer led the attack on the chancellor pointing to eye-watering tax rises Mr Sunak has overseen. He called the situation “breathtaking hypocrisy”.

Earlier Ms Murthy, wife of Chancellor Rishi Sunak, insisted she's "always" paid UK taxes after a report was released that she claimed non-domicile status.

A spokeswoman for Ms Murthy confirmed she held non-dom status and said: "Akshata Murthy is a citizen of India, the country of her birth and parent's home.

"India does not allow its citizens to hold the citizenship of another country simultaneously. So, according to British law, Ms Murthy is treated as non-domiciled for UK tax purposes."

"She has always and will continue to pay UK taxes on all her UK income."

Business Secretary Kwasi Kwarteng defended Ms Murthy earlier when speaking on LBC's Nick Ferrari at Breakfast, saying it's a "straightforward" legal status.

"I think he's been very straightforward about this. It's a very simple principle, the non-domicile status. What that means, is that you pay tax on your UK income in the UK.

"As far as I understand, she does. And then outside the UK, you pay the tax outside the UK.

"It's a very simple status, it's been around for over 200 years and the Chancellor has been very transparent about it. That's as far as I'm concerned the end of the matter."

Nick asked if it was right for the people to know "about the affairs of Mrs Sunak", and if the reveal is "at least a little damaging" as people "can't heat up the home for their children" due to tax rises implemented by the Chancellor.

Mr Kwarteng responded: "I think [the Chancellor] has always been clear and I think people have always known that he comes from a very affluent family.

"The implication there's been any wrongdoing is completely wrong and he's been very clear about those affairs."

It comes after Rishi Sunak's wife has defended her non-domicile status after it was claimed she could have saved millions by not paying UK tax on foreign income.

The Independent reported that Akshata Murthy, who is believed to be worth hundreds of millions of pounds, held non-dom status.

This means her permanent home is considered outside of the UK and, although she is still liable for UK tax on income made in this country, she does not have to pay UK tax on foreign income unless it is brought into the UK.

Kwasi Kwarteng defends Akshata Murthy's non-dom status

The newspaper claims the status could have saved the Chancellor's wife millions of pounds in tax on foreign earnings, but a spokeswoman for Ms Murthy said she has always paid UK taxes on her UK income.

Read more: PM has 'absolutely no problem' with massive tax hike despite millions facing poverty

The non-dom status is lawful and it is understood Ms Murthy pays foreign taxes on her overseas income.

But Labour said: "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 benefitting from tax reduction schemes.

"This is yet another example of the Tories thinking it is one rule for them, another for everyone else.

"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."

It is understood 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 Murthy is listed on LinkedIn as being director of capital and private equity firm Catamaran Ventures, gym chain Digme Fitness, and gentlemen's outfitters New and Lingwood.

She is also reported to hold a 0.91% stake in Infosys, which was founded by her now billionaire father.