Rishi's wife does not pay tax (millions!!) on dividends!

[FlowerArranger]

From today's Guardian :

Rishi Sunak’s multi-millionaire wife claims non-domicile status, it has emerged, which allows her to save millions of pounds in tax on dividends collected from her family’s IT business empire.

Akshata Murthy, who receives about £11.5m in annual dividends from her stake in the Indian IT services company Infosys, declares non-dom status, a scheme that allows people to avoid tax on foreign earnings.

www.theguardian.com/politics/2022/apr/06/rishi-sunaks-wife-claims-non-domicile-status?CMP=Share_AndroidApp_Other

Anyone as outraged by this as I am? I mean what the actual fuck?

declining to partake in financial contributions they would otherwise be liable for.

This is also factually incorrect.,they are not legally liable to pay these financial contributions (dividend tax) ergo they are not declining to contribute anything beyond what the tax law says. Tell me, if you’re a 20% basic rate taxpayer, and you decided not to pay the higher rate of 40%, does that mean you’re “declining” to pay? When you’re not even liable to pay the higher rate?

Does domiciled mean "mainly living in a certain country" ?
I live in Ireland and have heard on good authority that Irish tax exiles fly into Northern Ireland and then drive or are driven to the Republic of Ireland thus getting around the so many days allowed rules.

Cornnetoninja It does look bad for him as Chancellor to have a very rich wife who is not paying taxes as an ordinary British citizen in the UK. But it's perfectly possible for them to have different attitudes towards the UK. He may feel very British and be very invested in its future, as he was brought up in the UK. She may well have a very different attitude towards the UK as she is an Indian born and brought up there. I think for very rich people as they both are, they are very much insulated from a country's economic hardships but the same goes for Cameron/Osborn etc All rich people would benefit the same things - basically lower taxes which is what Tories promote anyway. So on whole they face the same conflict of interest as any rich couple would. But I think the British/India makes things worse.

Rishi's wife does not pay tax (millions!!) on dividends!

Rishi's wife does not OWE tax (millions!!) on dividends

@Appleandoranges She's not a British citizen. She's an Indian citizen and pays tax to India on her income made in India and tax to the UK on income made in UK.

basically lower taxes which is what Tories promote anyway.
Only for rich people - the rest of us have to pay for it.

@EmpressCixi

think he should be able to see the conflict of interest and accept that his ambitions will be limited by his wifes. At the most basic level, RS and his family aren’t as invested in this country and it’s future whilst they’re financially benefiting from declining to partake in financial contributions they would otherwise be liable for.

That way racism lies. You’re literally saying that no one should aspire to to PM if they’re married to a nonBritish Citizen....because noncitizens are “not invested in this country” blah de blah more xenophobia against a brown Indian woman.

That's what this outrage all boils down to. But as usual people on here will fall over themselves to deny it.

@LadyEloise1 that sounds like more to do with tax residency which can limit the number of days someone can spend in a place like the UK or RoI before being resident for tax purposes. The UK tried to drag in other ties like home ownership, children's schooling and so on as well as the absolute number of days. There were cases where overstaying for a day could trigger a relatively large tax liability for someone claiming not to be resident for tax purposes, such as if a flight were delayed by fog.

Residency can be important for the stereotypical person who becomes a non-resident by moving to Monaco or Sark before triggering a large income or capital gains such as by selling a company or taking a hge dividend and doesn't want the UK tax authorities to take a share but still wants to visit/run their business in the UK or visit family.

Domicile is a little different and simplistically determines whether someone's overseas earnings are liable for UK tax hence the issue here.

Plenty of white people are or were non doms including some born in Britain so I'm not sure wanting it to stop / thinking those in public office shouldn't take advantage of it constitutes racism.

Zac Goldsmith is a former non dom.

https://en.wikipedia.org/wiki/Listoffpeoplewithhnon-domiciledstatussintheeUK

This "story" is about deflecting from Partygate fines and the cost of living crisis. It's also got racism thrown in for good measure. Even on MN, there are people who think that UK expats shouldn't be able to vote in elections as they aren't invested in the UK so a wealthy foreign wife who hasn't got British nationality paying tax to more than one country appeals to the racists.

She's not breaking any laws. There's over 110,000 people living in the UK claiming non dom status and they pay some tax in the UK. This is from the uk government website

OP, I’m cringing with embarrassment for you. It’s clear you don’t know what the law is (few people do, it’s complex). But please, at least don’t fall for the media spin.

Do you know what non domiciliary status actually is? Who invented it and what for? Who originally benefited from it and why? Changes to the rules in the past 15 years?

Look into it and then come back to this thread. They’re playing you, and you’ve fallen for it. Easy to do when it’s a ‘bloody foreigner’, eh.

'She's not breaking any laws' is true. Whether it's good optics for a Chancellor who wants to become PM to be married to a non Dom is another thing entirely. With their wealth they could pay the millions of tax on that Infosys dividend and not bat an eyelid.

What I find perplexing is why a man with an MBA from Stanford, ex Goldman Sachs, ex hedge fund partner married to a billionaire's daughter (who may well be a billionaire herself) would want to become an MP on £80k a year (or less when he was elected in 2015j . Is his desire to serve the public really that strong? Or is he there to protect and boost his family wealth?

If I was his wife's family, I would have had Rishi sign a prenup. There's nothing wrong with him trying to become an MP PM and creating his own wealth and influence. First Asian PM would be a big deal if it happened.

The thing is I'm not sure we can say her non dom status is just a tax dodging thing. I think the thing is she was always an Indian citizen and she is rich because of her parents company which was based in India. So it's quite natural/normal for her to elect to be a non dom. It's slightly different from Zac Goldsmith or whoever who was born and brought up here electing to be a non dom. I am sure she or whoever manages her affairs to reduce taxes like most rich people. Depends whether people believe her husband being a Chancellor means she should then change things, become a British citizen/elect to be treated as domiciled here etc. In the grand scheme of things, it may be fairer for her overseas earnings to be taxed in India though! (much poorer country than UK and that's where the company was built up)

She's an Indian citizen and always has been, and these are dividends in an Indian company. She will therefore presumably be paying tax on the income in India. This isn't her exploiting some obscure technical loophole - it's how our tax system works.

There are many reasons to object to Sunak's politics (e.g. I understand he's pro-austerity) and the conservative government's policies in general, but this isn't really one of them.

@LadyEloise1

Does domiciled mean "mainly living in a certain country" ? I live in Ireland and have heard on good authority that Irish tax exiles fly into Northern Ireland and then drive or are driven to the Republic of Ireland thus getting around the so many days allowed rules.

No domicile and residency are two different concepts . You can be resident but not domiciled or you can be domiciled and non resident ( as my my own brother is , he hasn’t lived in the U.K. for 30 years but he is U.K. domiciled)

You can apply for a domicile ruling but it’s a question of fact. The difference between Ashcroft and Sunsks wife us that Ashcroft was U.K. domiciled and succeeded in becoming non domiciled ( this is not easy I used to deal with these situations ) . In Sunak’s case she has never been U.K. domiciled , she has only been a U.K. resident since 2015 apparently . I think it would be quite difficult for her to become domiciled . Residence is very different.

Having non domicile status for tax purposes is very much a choice. The very rich chose it for tax reasons - it’s not imposed on them and it’s not dependant to your citizenship, it’s dependant on where your main residency is.

If you reside here then it’s difficult to claim you really are non-domicile.

That’s why Rishi had to declare it to HM Treasury.

As a cabinet minister he has to declare any such conflicts of interest - it’s the same in the private sector - you declare any relevant conflicts of interest.

It’s not racist. It’s fact.

it may be fairer for her overseas earnings to be taxed in India though! (much poorer country than UK and that's where the company was built up)

I'm not a tax accountant but if she was a UK tax resident (which she is actively choosing not to be), I believe the dividend would first be taxed under Indian tax laws and then a calculation would be made as to the UK tax liability on it. Due to double taxation treaties and relief the UK tax due would be the difference between the 38% taxable in UK and what had already been paid in India.

So India would not lose any tax revenue if she changed tax status. But she would have to pay further tax in the UK on the dividend and any other overseas income.

I think it would be quite difficult for her to become domiciled

No, that’s not true. It would be easy to become domiciled if she meets the conditions!!

@Octomore

She's an Indian citizen and always has been, and these are dividends in an Indian company. She will therefore presumably be paying tax on the income in India. This isn't her exploiting some obscure technical loophole - it's how our tax system works.

There are many reasons to object to Sunak's politics (e.g. I understand he's pro-austerity) and the conservative government's policies in general, but this isn't really one of them.

Again this is wrong. Do you understand tax laws are different from citizenship laws?

@cherryonthecakes

If I was his wife's family, I would have had Rishi sign a prenup. There's nothing wrong with him trying to become an MP PM and creating his own wealth and influence. First Asian PM would be a big deal if it happened.

How do you know they didn't?

75,700 people claimed non-dom status in tax year 2019/20

To be domiciled, you have to have lived in the UK 15 years out of the last 20. The couple married in 2009 so it's possible that she's not lived in the UK for 15 years.

@daimbarsatemydogsbone It was a reference to the previous post asking whether Rishi was really motivated by public service.

HMRC website says:

UK residence and tax

Your UK residence status affects whether you need to pay tax in the UK on your foreign income

Non-residents only pay tax on their UK income - they do not pay UK tax on their foreign income

Residents normally pay UK tax on all their income, whether it’s from the UK or abroad. But there are special rules for UK residents whose permanent home (‘domicile’) is abroad

So if she resides in the UK, then she should pay tax on all worldwide income. She can reside in the UK and not be a UK citizen.

So the question is, does she reside in the UK or not? The rules do not depend on what passport you hold.

@EmpressCixi

think he should be able to see the conflict of interest and accept that his ambitions will be limited by his wifes. At the most basic level, RS and his family aren’t as invested in this country and it’s future whilst they’re financially benefiting from declining to partake in financial contributions they would otherwise be liable for.

That way racism lies. You’re literally saying that no one should aspire to to PM if they’re married to a nonBritish Citizen....because noncitizens are “not invested in this country” blah de blah more xenophobia against a brown Indian woman.

I suppose it could be classed as xenophobia, but I don’t know what other, if any definition would fit the notion that people who hold some of the highest offices in the country shouldn’t be financially swayed by foreign interests tbh. For the record I feel much the same about many of our parliamentary members relationships with Russian oligarchs and Chinese ‘businessmen’. It’s a massive conflict of interest. If their connection is through marriage, then yes I feel they shouldn’t have that power.

Private individuals and companies are a different set of issues but they’re at least supposedly governed and held to account for dealings that negatively impact the UK public.

This is also factually incorrect.,they are not legally liable to pay these financial contributions (dividend tax) ergo they are not declining to contribute anything beyond what the tax law says

My understanding was it was is a choice to seek non-dim status. Apologies if that’s incorrect.

I get the point about not choosing a higher tax status if the law states I’m only obliged to pay a lower amount, but that’s the point isn’t it? The law still provides loopholes for those rich enough to profit and take advantage of them and aren’t necessarily morally correct. Those in a position to review them from a moral position and ensure that they’re fair and work in the publics interest, aren’t fit to do that if there is a conflict of interest.

My issue isn’t with Rishi’s wife taking advantage of a loophole, it’s the fact that he is a protector of the loophole. One that a previous Tory exchequer sought to close which tells me they know what a con it is. Any credibility that he is impartial is in question because of his personal life.

I’m not naive, I know that this goes on with others but they’re wrong too.