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Rishi Sunak’s wife has potentially avoided up to £20m in UK tax by not being domiciled and is paying £30,000 a year to keep her status – revelations that come against a backdrop growing political pressure on the Chancellor.

Akshata Murty receives around £11.5million a year in dividends from a stake in an Indian IT company and declares non-dom status, allowing people to avoid tax on foreign income, a he revealed on Wednesday.

On Thursday, his spokesman said all necessary taxes had been paid by Murty, but declined to say where because the information was not “relevant”. They admitted it was possible for someone in the position of a multi-millionaire to take advantage of tax havens on income earned outside the UK.

Keir Starmer, the Labor leader, said it would be “breathtaking hypocrisy” if Murty had cut his debts while the chancellor was raising taxes on others amid a cost of living crisis.

The row risks further damaging Sunak’s carefully honed brand among Tory voters and MPs, already affected by last spring’s declaration, with a former minister warning that the timing was particularly bad days after the law took effect. increase in national insurance.

Murty has collected around 5.4bn Indian rupees (£54.5m) in dividends from Infosys, the India-based IT company founded by his father, over the past seven and a half years, a period for which there is public data. Non-dom status throughout this period could have saved him around £20million in UK tax.

Last year it received dividends of £11.6m. As a higher-rate UK taxpayer, she would have had to pay 38.1 per cent tax on the payment, which equates to £4.4 million. Prior to 2016, the rate was 30.6%. It rose to 39.35% this week.

One factor that could potentially reduce the total Murty would have been eligible for would be any reductions under double tax treaties between the UK and India, tax experts said.

Murty’s spokesman said they had no comment on the £20million figure beyond reiterating that she had paid the relevant UK and overseas income tax. They admitted that people benefiting from such tax arrangements could theoretically minimize payments by using tax havens, while saying they had no comment on whether Murty had done so.

Murty previously received other dividend income through the tax haven of Mauritius, which does not tax dividends. The spokesperson also declined to elaborate on the original explanation for Murty’s non-dom tax status — the fact that she has Indian citizenship — when that would still mean such a tax arrangement was a choice.

The Labor Party wrote to Sunak with a series of questions about his wife’s tax situation. James Murray, the Treasury’s shadow financial secretary, wrote it was in the ‘vital public interest’ for him to provide clarification on issues such as whether he had benefited from his wife’s status, how long she had claimed it and how much she had saved. .

“As chancellor, it’s crucial that you follow the rules and lead by example,” Murray said. “Any impression that there is one set of rules favoring some and another for all others threatens the integrity of our country’s tax policy.”

The Liberal Democrats said the case showed that a law that bars MPs and their peers from having non-dom status should be extended to spouses to avoid potential conflicts of interest.

Some Conservative MPs were also concerned. A former minister said: “The perception is [an attitude of] ‘What is the problem?’ Here is someone who is worth £3billion and has a different tax regime. I’m sure it’s all above board, but that’s not the point.

Another Tory MP, a Boris Johnson loyalist, said it would be difficult for MPs to endure given that Sunak had raised taxes. “There’s this guy, as rich as Croesus, raising taxes while people are worried about the next gas bill.”

While Murty’s spokesperson characterized his tax status based on his Indian citizenship, tax experts said non-dom status was not automatic but a choice.

Professor Richard Murphy, a University of Sheffield scholar who co-founded the Tax Justice Network, said: “Domicile has nothing to do with a person’s nationality. In other words, the claims made in the statement released by Ms. Murty are false.

Mike Warburton, former tax manager at Grant Thornton accountants, said Murty was entitled to an Indian tax domicile because of her father and because she was born there, saying it was “entirely legal and completely appropriate “for her to do so.

He said: “I don’t know, of course, but it may be that those shares are held in an offshore trust, possibly set up by his father. If I had advised her, I would have suggested it to them. In my opinion, this is all standard planning for anyone taking professional advice.

Speaking to Sky News, Starmer said the Chancellor ‘had very, very serious questions to answer’. The Labor leader said Sunak had repeatedly raised taxes. “He says all this is necessary, there is no other choice. If it now turns out that his wife used schemes to cut her own taxes, then I fear that is breathtaking hypocrisy.

“We need full transparency on this, so we can all understand what schemes she may have used to lower her own taxes.”

Earlier, Business Secretary Kwasi Kwarteng insisted the Chancellor and his wife had been ‘incredibly transparent’ about the arrangement.

Speaking to BBC Radio 4’s Today programme, he said: ‘She is an Indian citizen. And so, as you say, she pays tax here on UK income, but pays tax abroad on foreign income. But when asked where she had paid taxes overseas – in India or elsewhere like the Cayman Islands – Kwarteng replied: “I don’t know anything about her tax affairs.

Kwarteng added that Murty and Sunak had been “very transparent” about his status, and that Sunak said so when he became minister.

“Treasury, the department he works in, is aware of all these cases,” he said. “And there is a measure of transparency and he was very honest about it. And I think, as far as I’m concerned, that’s good enough for me. And I think we should move on from this story.

Earlier, Kwarteng had told Times Radio that non-domicile status had existed in the UK “for over 200 years”. He said: “It’s something that’s well established…I think there’s a lot of malicious attacks against someone who, after all, is a private citizen and not a politician.”

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