Chancellor Rishi Sunak admits he held US green card until last year as tax row deepens

8 April 2022, 00:22 | Updated: 8 April 2022, 17:42

Rishi Sunak has admitted he held a US green card for 19 months while he was Chancellor, but insists all laws were followed.

The revelation came as Boris Johnson has said Rishi Sunak did not tell him his millionaire wife held non-domicile status, meaning she does not pay UK tax on some income.

Green card holders must pay US tax on their global income and they must make America their permanent home.

Mr Sunak filed US tax returns, the chancellor's spokeswoman said, "but specifically as a non-resident, in full compliance with the law".

A spokeswoman for Chancellor Rishi Sunak said this afternoon: "Rishi Sunak had a green card when he lived and worked in the US.

"Under US law, you are not presumed to be a US resident just by dint of holding a green card. Furthermore, from a US immigration perspective, it is presumed that permanent resident status is automatically abandoned after prolonged absences from the US.

"At the same time, one is required to file US tax returns. Rishi Sunak followed all guidance and continued to file US tax returns, but specifically as a non-resident, in full compliance with the law."

Mr Sunak used his green card for travel purposes, his spokeswoman continued.

"Upon his first trip to the US in a Government capacity as Chancellor, he discussed the appropriate course of action with the US authorities. At that point it was considered best to return his green card, which he did immediately.

"All laws and rules have been followed and full taxes have been paid where required in the duration he held his green card."

Mr Johnson was quizzed about Chancellor's tax row at a press conference on Friday, with the PM asked whether he knew about Mr Sunak's wife Akshata Murthy's tax status.

He replied: "No."

However, when asked if he had confidence in the Chancellor, Mr Johnson said: "The answer is emphatically yes.

"I think that Rishi is doing an absolutely outstanding job."

He also denied reports people close to him were "briefing against the Chancellor", saying: "If there are such briefings they're certainly not coming from us in Number 10 - heaven knows where they are coming from."

Thornberry: Sunak non dom criticism is "fair"

It was revealed earlier that Rishi Sunak and his wife held US green cards, which allow people to live there permanently and subjects them to American taxes.

Green card status means a person is "generally subject to tax in the same manner as a U.S. citizen" meaning "their worldwide income is subject to U.S. tax and must be reported on their US tax return", according to the American Internal Revenue Service.

It is reported that both gave them up later during his time as Chancellor.

A spokeswoman for Chancellor Rishi Sunak said: "Rishi Sunak had a green card when he lived and worked in the US.

"Under US law, you are not presumed to be a US resident just by dint of holding a green card. Furthermore, from a US immigration perspective, it is presumed that permanent resident status is automatically abandoned after prolonged absences from the US.

"At the same time, one is required to file US tax returns. Rishi Sunak followed all guidance and continued to file US tax returns, but specifically as a non-resident, in full compliance with the law.

"As required under US law and as advised, he continued to use his green card for travel purposes. Upon his first trip to the US in a Government capacity as Chancellor, he discussed the appropriate course of action with the US authorities. At that point it was considered best to return his green card, which he did immediately.

"All laws and rules have been followed and full taxes have been paid where required in the duration he held his green card."

It comes as Mr Sunak broke his silence in the row over his millionaire wife's tax affairs, accusing critics of "smearing his wife to get at him".

He jumped to defend the non-domicile status of Mrs Murty, who does not have to pay UK tax on the millions she earns abroad.

Hitting back at attacks by opposition MPs, Mr Sunak told The Sun: "To smear my wife to get at me is awful."

He added: "She loves her country like I love mine."

He claimed the attacks on his wife, who lives with him at 11 Downing Street, were unpleasant and unfair and insisted she had done nothing wrong or broken any rules.

"I would hope that most fair-minded people would understand - though I appreciate that it is a confusing situation that she is from another country," he said.

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

What is a 'non-dom'?

"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.

"That is how the system works for people like her who are international who have moved here."

The Chancellor's wife has been slammed by critics after The Independent revealed that she held non-dom status.

Emily Thornberry, Labour's shadow attorney general, said somebody's background is immaterial to their tax status.

She said Mrs Murty made a "positive decision" as to whether she was non-dom or not.

"She made that decision so her world income is not taxed in the UK, she lives with a guy who has raised tax 15 times and is expecting ordinary working people to be bearing the burden of taxation because of the difficulties that we are in, not least because some of the decisions that he's made, but he doesn't expect his wife to make any of those sorts of sacrifices," Ms Thornberry told Nick Ferrari at Breakfast.

Criticism of the Chancellor's wife 'completely legitimate'

She added there would be a "conflict of interest" if he was involved in discussions about non-dom status in his work as Chancellor.

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.

It's been reported more than £4million in taxes has been swerved by her non-dom status.

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".

Read more: Rishi Sunak's wife a 'legitimate' target over non-dom tax status, says Jess Phillips

Read more: Rishi Sunak's millionaire wife Akshata Murty defends non-dom tax status

Rishi Sunak's wife is one of 78,000 'non-doms' in the UK

Labour MP Jess Phillips told LBC earlier that criticism over the chancellor's wife's non-domicile status is "completely legitimate".

"It is completely legitimate because it isn't just her who will be benefitting from this, it is also him," Ms Phillips said.

"This is the man who creates the tax laws in our country, and talks to ordinary people in my constituency about how they've got to put their hands in their pockets."

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

Heiress and businesswoman Akshata Murty is an Indian citizen and pays around £30,000 a year for non-domicile status — meaning she can live here but not pay UK tax on income she earns abroad.

On Wednesday Ms Murty claimed the non-dom status was given to her automatically as an Indian citizen.

Sir Keir Starmer says Rishi Sunak has 'very serious questions to answer' over his wife’s tax affairs

But yesterday tax experts said that she must proactively seek the perk each year.

The Chancellor added: “I can appreciate people find this situation confusing.

"But 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.

“She had this well before we met, before she moved to this country.

“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.”

Ms Murty 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.