Questions for UK's Rishi Sunak as wife's non-domicile tax status is revealed

Ms Murthy's permanent home is considered to be India and she does not pay UK tax on foreign income, it has been reported

Britain's Chancellor of the Exchequer Rishi Sunak with his wife Akshata Murthy during a reception for the British Asian Trust at the British Museum in London in February. AFP

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 the permanent home of Akshata Murthy, who is believed to be worth hundreds of millions of pounds, is considered to be outside the UK.

And although she is still liable to pay UK tax on income made in the country, she does not have to pay it for foreign income unless it is taken into the UK.

The newspaper claims the status could have saved her 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.

The status is legal and it is understood that Ms Murthy pays foreign taxes on her overseas income.

“The chancellor has imposed tax hike after tax hike on the British people," Labour said.

“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.

“Rishi Sunak must now urgently explain how much he and his family have saved on their own tax bill at the same time as he was putting taxes up for millions of working families, and choosing to leave them £2,620 ($3,424) a year worse off.”

A spokeswoman for Ms Murthy confirmed she held the tax status in the UK.

“Akshata Murthy is a citizen of India, the country of her birth and parent’s home," the spokeswoman said. “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.”

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 Murty is listed on LinkedIn as director of capital and private equity firm Catamaran Ventures, gym chain Digme Fitness, and men's outfitters New and Lingwood.

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