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?

Rishi is now pulling at the heart strings by saying his wife plans to return to India one day to care for her parents when they are elderly. What does that mean exactly? Is she planning to move there permanently? Will she go back for a bit and then return to the UK and still try to claim she's a non-dom? Some good journalist should pin him down and ask for a time-frame and if he will be moving to India with her. There doesn't seem much point in him angling to be PM if he's leaving the country in the next few years. (It's all so bloody cynical.)

Lot of Indians do this, I would if I can afford not to work or can relocate my job to India.
By the time her parents are unable to look after themselves, her children probably would be of age that they don't need her around that much or RS family may step in to look after the children or they will decide on a boarding school.
Culturally, it's normal and expected that you look after your elderly parents when they are old. Poor and rich people do this, getting paid help to look after the elderly is frowned upon but this is slowly changing.

Well, you can't put a time frame for this, can you ?

I predict she is planning to "move back" once her 15 years non Dom run out. It won't make any difference to her life because she will still be here while her children are at school, and at their American second home whenever and then sometimes in India. It will be the same as now but she will pretend she actually lives in India.

The wealth of her family is quite staggering. You'd think having that vast amount of money she could just pay the tax as a domiciliary of the UK. She's hardly going to miss a few million. She will never have any money worries. Is it her intention to return to India? Who knows? Maybe she'll go in to politics in India and Rushi can take a back seat.

Non-doms, if following the rules as set out in legislation, are not "exploiting the system" or taking advantage of a loophole.

The remittance basis rules are the "system". They are clearly written out in legislation and HMRC guidance and have been applied numerous times in court. They are not some elaborate tax avoidance scheme and you wouldn't necessarily need to pay a lawyer or tax adviser in order to use them. You basically just tick a box on your tax return. There's complexity in working out what you have remitted etc. but that is more about what UK tax you actually do owe.

The remittance basis is not "just" for rich people - if you have under £2k foreign income and are non-dom it applies automatically. In practice, low earning non-doms living in the UK who have a small amount of foreign income probably don't even realise that they could be liable for UK tax on it and may not fill in a tax return anyway.

A loophole is a way of getting round or exploiting current tax rules in a way which was not intended. An example would be a company paying employees in loans which it never intends will be repayable to avoid income tax (that loophole is now effectively closed).

If Sunak's wife is doing something much more elaborate by routing income through low tax jurisdictions which she has no connection with etc. and that somehow avoids Indian tax that's different but just claiming the remittance basis is simply a choice which the UK tax system gives you if you're a non-dom. It's like choosing to put some money in an ISA to get tax free interest on savings i.e. ISAs are specifically set up to allow this tax benefit, just as the remittance basis is designed to allow some non-doms not to pay UK tax on foreign income which remains outside the UK.

Yes, there is a time-frame on it because the media are reporting that she has lived here for 9 years. If she has claimed non-dom status for all that time then she has only got 6 years left. It would be very cynical of her to return to India for a bit to 'look after her parents' and then return to the UK after exploiting the claim that she does not truly consider the UK her permanent home. Rishi should be asked if he plans to stand at the next election or if he and his wife will be living apart.

It is an different story that his wife is rich.
But I don't get the fuss about Bread.
I have close friendship with an Indian family and they are just low middle class small family not rich(we know as we are close friends). Whenever I go to theirs for dinner she always cook 2-3 types of bread as normal like beans on toast for us.
Yes she cooked 3 types of bread out of same dough within fraction of minutes- soft one for baby (called chapati) as she has only 4 teeth, luxury stuffed cheese one for us and normal with purified butter for her and DH. She told me (obviously back then) that, in every Indian house hold, it is normal to cook fresh bread almost every day and she cooks it different as it can be prepared from same dough.

Why are you outraged? She pays tax on the money in the country it was earnt. Surely that’s fair?

Are you suggesting she earns the money in a different country, but pays the uk tax for it.

I bet you are also outraged that the tax Amazon pay to the uk is very low versus the income it makes here. And you would be right. That’s highly unfair.

But you are suggesting that’s what she does? Earn it elsewhere but not pay tax in that country…

Where she pays tax is unclear.

On the point of non-domicile status not just being for the rich, Newsnight has just reported that just 0.3% of non-doms earn less than £100 000 per annum.

@Dimondsareforever

Why are you outraged? She pays tax on the money in the country it was earnt. Surely that’s fair?

Are you suggesting she earns the money in a different country, but pays the uk tax for it.

I bet you are also outraged that the tax Amazon pay to the uk is very low versus the income it makes here. And you would be right. That’s highly unfair.

But you are suggesting that’s what she does? Earn it elsewhere but not pay tax in that country…

She is married to the chancellor, for one thing. And she LIVES here, which the rules say mean she should pay here. And if she doesn't, that's interesting too.

The ignorance here is awful. no wonder UK is struggling to compete with other nations with Net warriors vs. real life winners

Instead of being morally outraged, get off your butt and work hard

Go ahead and overpay your tax so you can be a 'good' citizen

@EsmaCannonball
It cannot be the case that only 0.3% of non-doms earn less than £100k per year because essentially any one who is in the UK temporarily is a non-dom. That includes foreign students, workers seconded to work in the UK for a year from abroad and basically anyone who is in the UK but who intends to go back to their home country in future. It will include lots of ordinary people like nurses, fruit pickers, waitresses, nannies and au pairs, factory workers etc.

What I think Newnight is probably talking about is people who actually claim the remittance basis on their tax return. But of course those people who actually fill in a tax return in order to make a claim earn more money because for lower earners the remittance basis applies automatically where their foreign income does not exceed £2k and they don't have any reason to fill in a tax return. And even if their foreign income is actually (say) £3k, how many foreign students studying in the UK or young adults here on a gap year fill in a tax return even if technically they should.

It’s weird. Investment bankers pay millions in tax and are hated despite helping balance the books; the chancellor’s wife pays very little and is defended here. Most bankers are not citizens either but are residents for tax purposes.
Unbelievable the excuse she gave.

tbf it's not clear where this tax on her foreign income is actually paid. It could be in India which you would think fair enough it's an Indian business and she's an Indian citizen. But for all we know it's paid via a tax haven such as Mauritius or the Cayman Islands.

Also the non dom status rule is a bit of a joke. One can be non dom for up to 15 years by declaring an intention to return at some point to ones domiciled country. But there's nothing to stop a person say after 14 years changing this. So you benefit for 14 years and is completely legal.

Anyone claiming she pays tax in India - do you have a source for that? I understood her spokesperson declined to answer where she pays tax on her overseas income. Every chance she's got her money in a tax haven rather than paying the Indian Government her taxes.

Richard Murphy gives a really good explanation on Twitter of how the system is bucked.

twitter.com/richardjmurphy/status/1511964400978214912?s=21&t=Qszq9mKLiY5larJn3am_zg

@Canima

The ignorance here is awful. no wonder UK is struggling to compete with other nations with Net warriors vs. real life winners

Instead of being morally outraged, get off your butt and work hard

Go ahead and overpay your tax so you can be a 'good' citizen

So enlighten me how has the wife of the Chancellor got off her butt and worked hard rather than being born into an unbelievably rich family? I don’t care how many people say this doesn’t break any rules (and I’m sure it doesn’t as Rishi is too smooth for that) but it reeks of rich people playing the tax avoidance rules and the same people saying this breaks no rules would be the first to have a go at someone on benefits doing a bit of cleaning or hairdressing cash in hand.

@Dimondsareforever

Why are you outraged? She pays tax on the money in the country it was earnt. Surely that’s fair?

Are you suggesting she earns the money in a different country, but pays the uk tax for it.

I bet you are also outraged that the tax Amazon pay to the uk is very low versus the income it makes here. And you would be right. That’s highly unfair.

But you are suggesting that’s what she does? Earn it elsewhere but not pay tax in that country…

She declined to confirm she pays tax in India.

Plus, giving up her non-dom status wouldn't prevent her from returning to India. She has the kind of wealth which means she can live anywhere.

Complete non story. It’s not illegal, it’s actually the smart thing to do.

Doesn't seem too smart of Rishi. He's currently spluttering his way through the pages of The Sun in a way that makes Will Smith seem considered and restrained. The best bit is his agreeing it's all a Labour smear campaign when we can all see he and Boris are knifing each other in the back.

Calling it a non story is an attempt to prevent us rank and file minions from daring to see how tax loopholes favour the wealthy.

Non-dom status has existed for over 200 years since it became possible for people to be born/live/work in different countries, and as somebody has already pointed out there tens of thousands currently in the UK. What tax should they pay and where has always been highly complex and a difficult problem.

About two thirds of premier league footballers are probably non-doms. 241 out of the 256 singles players at Wimbledon are non doms. The 2013 and 2017 UEFA champions league finals were in the UK and featured no UK teams. Does anybody want to guess the tax affairs for all these and say what amounts of UK tax is fair?

How dare she has 400m from inheritance and live in UK by paying tax only on UK earnings.
She should show morality and distribute her all earned/inherited money in bank accounts of all UK residents and become bankrupt. Every one will go happy. Sunak still be a non PM ogh!!

Tennis players at Wimbledon? Well I hardly think there'd be a reason to query their non dom status. How long do they stay in the UK for? A month or two. Same with many football players who move around different countries quite regularly.

Rishi's wife appears to be much more permantly resident here.