Rishi Sunak's allies ‘blame No 10’ for smears against his wife

The UK Chancellor defended his wife, insisting she had done nothing wrong

File photo dated 09/02/22 of Chancellor of the Exchequer Rishi Sunak alongside his wife Akshata Murty, as the Chancellor's family has been accused of "sheltering" itself from paying tax in the UK after it emerged his wife holds non-domiciled status. PAShow less

British Chancellor of the Exchequer Rishi Sunak has defended his wife after it emerged she holds non-domicile tax status, amid reports that his allies have accused No 10 of being responsible for the revelation.

Mr Sunak said his wife Akshata Murty — who is estimated to be worth hundreds of millions of pounds — had done nothing wrong in choosing a financial arrangement that means she is not legally obliged to pay tax in Britain on foreign income.

He has blamed Labour for the “awful” smears against his family, but the Telegraph reported that unidentified allies of the Chancellor claimed Prime Minister Boris Johnson’s office was behind the leaks – an allegation Downing Street strongly denied.

“It is categorically untrue that No 10 is behind the briefings," said a Downing Street spokeswoman. “The Prime Minister and Chancellor are united.”

Mr Sunak told The Sun newspaper that Ms Murty was entitled to use the so-called “non-dom” arrangement as she is an Indian citizen and plans to move back to her home country to care for her parents.

The fashion-designer daughter of a billionaire married Mr Sunak in 2009 before he became an MP.

She is reported to hold a 0.91 per cent stake in Infosys, an IT business founded by her father, Narayana Murty, with The Guardian reporting that the share is worth £11.5 million ($15m) a year to Mr Sunak’s wife.

The paper also reported Ms Murty had avoided up to £20m in UK tax by being non-domiciled.

With Ms Murty born in India and her father also from the country, UK government rules allow her to list India, rather than the UK, as her permanent residence, meaning different tax rules on foreign earnings apply.

Mr Sunak said it was “unpleasant” to read attacks on his wife “especially when she hasn’t done anything wrong”.

“She hasn’t broken any rules. She’s followed the letter of the law,” Mr Sunak told The Sun.

He said his wife “pays full UK tax on every penny that she earns here in the same way that she pays full international tax on every penny that she earns internationally”.

Asked if he thought his family were victims of a “Labour smear campaign”, Mr Sunak said he did.

Britain’s Chancellor of the Exchequer Rishi Sunak and his wife Akshata Murty arrive for the British Asian Trust Reception in London on February 9. EPA

But Labour hit back, with a party source telling saying: “The Chancellor would do better to look a little closer to home.

“It’s clear that No 10 are the ones briefing against Rishi Sunak and, after his failure to tackle the cost-of-living crisis, you can understand why.”

Opposition leader Sir Keir Starmer said on Thursday that Mr Sunak could be guilty of “breathtaking hypocrisy” if his wife was reducing her own tax bill as the the chancellor increases national insurance for millions of Britons.

Prime Minister Boris Johnson avoided questions on Ms Murty’s tax situation, saying it was important to keep families out of politics “if you possibly can” when asked by broadcasters for his opinion.

Ms Murty confirmed her “non-dom” status after The Independent website first reported the arrangement on Wednesday, the day the 1.25 percentage point rise in national insurance took effect.

It means her permanent home is considered to be outside the UK despite the Sunaks living in Downing Street.

Ms Murty pays an annual levy of £30,000 ($39,000) to the UK government to keep her non-dom status, her spokeswoman said.

The status will automatically cease when she has lived in Britain for 15 years, which would happen in 2028.