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?

@Choux

Who qualifies as a non-dom resident? A person with non-dom status is someone who lives in the UK and is tax resident here, but who has their permanent home outside the country. They must demonstrate to HMRC that their domicile – at least for tax purposes – is in another country. Usually their domicile will be the country that their father considered their permanent home when they were born, and to which they intend to eventually return, perhaps when they retire. Because they are tax resident in the UK, non-doms will typically not be tax resident in their country of domicile, and therefore not liable for tax in either country on their worldwide income.

So she is effectively saying she is only here temporarily. Interestingly non doms are likely to not be tax resident anywhere and so she will not pay tax in the UK or India on that 11 million dividend!

She is tax resident in the UK. It is 100% not the case that she is "likely to not be tax resident anywhere".

She will be liable for UK tax on her UK income.

She will be liable for Indian tax on her Indian income.

I think spouses should be off limits.

@cyclamenqueen

There are a lot of people on this thread who don’t know the difference between domicile and residency

It is complex, to be fair, but yes - the amount of misrepresentation on this thread is astounding.

People googling stuff, then totally misreading/misinterpreting what they find.

Non-doms have to specifically apply for a tax exemption on foreign income of more than £2,000, meaning it is not an automatic designation for foreign-born residents or non-citizens.

Non-domiciled individuals have to apply to be taxed on the remittance basis, yes. But someone's domicile is a matter of fact, which the courts will determine if necessary. It's not something you just choose because it suits you.

Do Rishi or his wife have millions (or billions) offshored?

I've only done some brief reading but Rishi Rich has had businesses linked to the cayman islands and has apparently (I haven't fact checked the fact check site) declared just the bare minimum of information on the parliament register.
Feel free to correct me if this is wrong.
I was curious as to when he entered politics. I couldn't see when just when he was elected as mp in 2015. That's a very short space of time to learn a new trade, become proficient at it and take on new responsibilities/promotions.

In order to acquire a new domicile (such as the UK) she would need to break her ties to her domicile of origin (which is India).

I'm not aware that she has broken ties with India, has she? She has retained her Indian citizenship, and has voting rights there. Her financial interests appear to be in India, most of her assets appear to be in India. Her family is in India.

I hate the Tories as much as anyone, but this whole thing is so obviously just Boris briefing against Rishi. There are plenty of MPs who are themselves engaged in far more dodgy activities that Boris isn't briefing against, simply because it doesn't suit him to do so right now.

Why shouldn't she be 'tight lipped'? She is a private citizen and actually I do think it is inappropriate to ask random Tory politicians what they think she feels about the UK as her home country. Its actually really sexist and backward to be linking the two of them in this way she is an independent person and businesswoman in her own right. She's not 'Mrs Sunak'. And the company she had a 1% share in didn't have to be 'dragged kicking and screaming' out of Russia. They took a few weeks to implement the closure of an office in Moscow, putting affairs in order first. But let's not let reality get in the way of dramatics.

(I'm also all for getting rid of 'non-dom' status itself, as it's a nonsensical relic.)

Oh dear, is she domiciled or non-resident in Mauritius?

I find all the, 'Oh well, wouldn't everyone use loopholes to pay less tax if they could? Anyone who doesn't is an idiot,' arguments disingenuous. Most people are excluded from having the option of 'tax management,' and if a care assistant or a teaching assistant somehow managed to avoid a bit of tax that money might mean he or she can top up the gas meter or avoid the rent bailiffs. If the Sunaks didn't avoid tax what would they have to go without? What material difference would it make to them?

@Octomore

Non-doms have to specifically apply for a tax exemption on foreign income of more than £2,000, meaning it is not an automatic designation for foreign-born residents or non-citizens.

Non-domiciled individuals have to apply to be taxed on the remittance basis, yes. But someone's domicile is a matter of fact, which the courts will determine if necessary. It's not something you just choose because it suits you.

Agreed. These two things are getting confused I think.

We get the Government we deserved . The public get what the public want as Mr Weller said.

@mellongoose

I think spouses should be off limits.

If they got divorced their assets would be treated as joint so why do you think her financial affairs are off limits?

I think the idea of having a person in high office who is married to someone domiciled outside of the UK is horrendous. Not that they can't be married to someone from elsewhere, but that they and their family make a commitment to living in the UK. This would not fly in other countries.

Husbands and wives are legally linked (including for tax breaks). If Rishi were claiming his pension or benefits he wouldn't be able to say to the DWP, 'I'm sorry but my wife is a private individual and it's really, really sexist of you to pry into her financial affairs. She isn't a mere extension of me, you dinosaur!' That isn't how it works. You can't have all the legal and financial benefits of marriage but disavow any connection to your spouse when it suits.

Due to the situation in Ukraine I've been doing a lot of reading about kleptocrats, oligarchs and the super-rich, and one of the things that really has to be tackled is the corruption caused by financial secrecy. It's not just a question of poverty and inequality, it's about national security. How can someone be Chancellor of the Exchequer if there is so much murk around his own family finances? How is this not a massive conflict of interest?

There are nearly 76k non doms in the UK who are either paying nothing or £30-60k per year for the privilege of saying to HMRC 'you only need to know about my UK income, nothing else'. That's the equivalent of a small - med size town where everyone is (legally) avoiding paying substantial amounts of tax to HMRC. For 15 years each. I don't get why is it allowed to persist other than that these people include some Tory donors.

www.gov.uk/government/statistics/statistics-on-non-domiciled-taxpayers-in-the-uk/statistical-commentary-on-non-domiciled-taxpayers-in-the-uk

@EsmaCannonball

Due to the situation in Ukraine I've been doing a lot of reading about kleptocrats, oligarchs and the super-rich, and one of the things that really has to be tackled is the corruption caused by financial secrecy. It's not just a question of poverty and inequality, it's about national security. How can someone be Chancellor of the Exchequer if there is so much murk around his own family finances? How is this not a massive conflict of interest?

I totally agree. I can't believe people are twisting themselves in knots to make out any of this is OK. It bloody isn't. The greed of this super rich couple is beyond belief.

@EsmaCannonball

Husbands and wives are legally linked (including for tax breaks). If Rishi were claiming his pension or benefits he wouldn't be able to say to the DWP, 'I'm sorry but my wife is a private individual and it's really, really sexist of you to pry into her financial affairs. She isn't a mere extension of me, you dinosaur!' That isn't how it works. You can't have all the legal and financial benefits of marriage but disavow any connection to your spouse when it suits.

Legality and morality are separate. What’s hers is ‘legally’ his. But nobody would argue that he’s morally entitled to say what she does with her family wealth.

Rishi is greedy and out of touch, agreed.
But that’s not due to his wife’s wealth. It’s due to his OWN privileged upbringing!

Whether or not she was wealthy would have made no difference really.

The OP : should we be angry about this.
Me : not really.

Actually you can't choose to be non-dom. A domicile of origin is notoriously hard to shake off.

I completely agree.

We were non-doms until 3 years ago as we have now lived continuously in the UK for 18 years. Until then, we were US-domiciled. We did not notice the passing of our non-dom status.

I don't think we have benefited from this status as the only thing we may have had is some dividends a long time ago.

US citizens and permanent residents always have to file tax returns as they are taxed on world-wide income.

If the UK was really worried about tax receipts from non-doms they could pass similar legislation.

However, it is a balance between having foreign citizens resident in the UK paying UK taxes on UK income, and having them living in Monte Carlo.

LegMeChicken read the Ministerial Code that someone posted earlier. It really does matter.

7.3 On appointment to each new office, Ministers must provide
their Permanent Secretary with a full list in writing of all interests
which might be thought to give rise to a conflict. The list should
also cover interests of the Minister’s spouse or partner and close
family which might be thought to give rise to a conflict.

Husband and I lived and worked in Switzerland and France for 18 years. When we retired, husband got part of his pension pot as a lump sum. We had the choice between paying 10% French tax or over 50% UK tax. Well what would you have done? We sorted out our moving date to ensure we were still in France when it went into our bank account and paid the French tax. Then we moved back to the UK!

@Iworkedandlivedabroad

Husband and I lived and worked in Switzerland and France for 18 years. When we retired, husband got part of his pension pot as a lump sum. We had the choice between paying 10% French tax or over 50% UK tax. Well what would you have done? We sorted out our moving date to ensure we were still in France when it went into our bank account and paid the French tax. Then we moved back to the UK!

That's not what is happening in this case though.

@ClaudineClare

LegMeChicken read the Ministerial Code that someone posted earlier. It really does matter.

7.3 On appointment to each new office, Ministers must provide
their Permanent Secretary with a full list in writing of all interests
which might be thought to give rise to a conflict. The list should
also cover interests of the Minister’s spouse or partner and close
family which might be thought to give rise to a conflict.

This must have been what was meant when it was stated all conflicts were declared this morning on R4. So this has happened.

@OverByYer

A non story really. She pays her taxes in India as she is and Indian citizen . Looks to me as if Team Boros are briefing against Rushi as they see him as a credible threat to his leadership ( there is no leadership)

She’s resident here. Domicile is not the same as citizenship.

@Iworkedandlivedabroad

Husband and I lived and worked in Switzerland and France for 18 years. When we retired, husband got part of his pension pot as a lump sum. We had the choice between paying 10% French tax or over 50% UK tax. Well what would you have done? We sorted out our moving date to ensure we were still in France when it went into our bank account and paid the French tax. Then we moved back to the UK!

Well firstly that’s not an ongoing interest generating regular revenue, secondly I presume that neither you or your husband held a seat in parliament?