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?

It's peanuts to her as a billionaire, I don't know why they've done this. Then again why would someone as rich as sunak want to be chancellor and make poor people poorer. It's mad when you think about it. Also it would be fraud if you didn't declare your spouse or live in partners wealth and income to get tax credits or universal credit. People go to prison for this very crime

[quote Chessie678]@SamphirethePogoingStickerist
That's exactly right. Something isn't a loophole if there's a box on your tax return to claim it and a specific charge to pay to opt in.

It's like companies claiming research and development relief or an individual getting a lower rate of inheritance tax because they have donated a certain portion of their estate to charity. There's no box on the tax return which says "please divert my income through the Cayman islands using a 12 step process and various trust structures" because it's not intended by parliament that you do that.

Non-dom status and the remittance basis is a very longstanding and intentional part of the tax system. It isn't something which Sunak or the Tories have just invented for their own benefit.

It remains because:

• overall it likely raises more tax revenue than it loses - although rich non-doms save tax by using the remittance basis if they didn't have this option a lot of them would ensure that they are not UK resident at all and therefore pay no / minimal UK tax;
• there are economic benefits to the UK in rich people living and spending money here;
• it helps attract foreign business people etc. to the UK e.g. the head of a large foreign tech company is headhunted to the UK. They have a significant stake in the foreign tech company which they get dividends from. Without the remittance basis they would have to pay UK tax on these foreign dividends (less any foreign tax already paid). They may well decide not to take the opportunity or to do so in a way where they don't become UK resident;
• there are compliance issues in terms of working out how much foreign income which never comes into the UK someone is actually making.

Fine to disagree with that rationale but that's why the system is as it is.

There's a question of fact as to whether Murthy actually legitimately has non-dom status here but people have explained upthread why that might be plausible (basically that changing domicile is quite difficult and doesn't necessarily depend on how much time you spend in the UK).[/quote]
It remains because it is politically expedient for it to. Unless anyone has any real hard evidence that it provides the benefits you claim, which I doubt they do.

Trickle down economics is utter bollocks. It has no basis in fact whatsoever. Giving rich people tax breaks does not provide significant benefits to ordinary tax payers and the idea that we should be worried about scaring of people who pay so little tax in the first place is questionable at the very least, even before you factor in that many wouldn't leave anyway.

The fact that they both had or have green cards for the US massively complicates it considering they would be liable to American FATCA law. I wonder if this will turn out to be all about that. It's funny because FATCA is reason why Johnson renounced his US citizenship

I didn't say everyone voted for it. I said people voted for it.

The will of the people. Corruption and lies.

I'd forgotten about that. If people think non dom is werid FACTA is Godzilla levels of odd, global overreach!

Are her tax arrangements legal - Yes
Are her tax arrangents immoral - Yes
Are her tax arrangements unethical - Yes

Simply because of who they are.

Non-dom status is not "just for the rich".

A Polish EU citizen has lived here for 4 years working in the building trade. By no means could he be described as rich. After a year he was joined by his wife and kids. He still owns his original building business in Poland (now run by his brother) from which he receives profits, and owns his house in Poland that he rents out. This money earned in Poland stays there and is not subject to UK tax due to his non-dom status.

I originally defended her. I've changed my mind. It's simply not acceptable for the Chancellor of the Exchequer's wife, who lives in Downing St, whose children go to school here, to say that the UK is not her home.

I originally defended her. I've changed my mind. It's simply not acceptable for the Chancellor of the Exchequer's wife, who lives in Downing St, whose children go to school here, to say that the UK is not her home.

Firstly they don't live in Downing Street, I think they have retained their private residence which is in North London (George Osborne also did this as did Savid Javid )

Secondly domicile in tax legislation is nothing to do with where you live, that is residency. or where your home is .Currently as I understand it the Chancellors wife is resident in the UK but as far as I can see spends an awful lot of time in the US and in India as well.These factors such as children's schooling , amount of days in the uk , the availability of accommodation are relevant to her residency they are not relevant to her domicile. These terms have particular meanings within the tax legislation and these meanings may not always correlate to their everyday meanings.

Do you not have to pay 30k a year for non Dom status? I think then it is "just for the rich"

[quote SamphirethePogoingStickerist]@Dahliasrule I don't get all the 'optics' stuff. It (any kind of 'it') makes little difference to me in any part of my life. If it works it works, if it does not work then it doesn't matter what it looks like.[/quote]
It does matter to many people though.

To me, talking about the optics means that if RS is involved in this then what else should be called into question and can we really trust impartiality and the best interests of this country in his current position or even consider him for PM from this point forward? He didn’t consider it important enough to declare, clearly people disagree so what else is he taking decisions on that would be badly judged as ‘no one will care about this’.

Cards on the table I clearly have no love for the tories and certainly not this cabinet. There have been rumblings for a long, long time about the behaviours of many members but, unfortunately, the state of this country’s set up means that without media interest no real conversation takes place and lots of issues become brushed to one side. It’s abysmal from where I’m sitting and frankly if the bandwagon is singing a tune I’ve been aware of for some time I’ll take the opportunity to jump on it and hope it gains more legs than was probably the original intention.

I was reminded this morning on the radio that last year the private eye questioned Akshata Murthy about her non-dom status and her office declined to answer. They also posed questions regarding his hedge fund company I believe.

AM may not be the elected official here but the fact is her husband is and he will have an interest in her success and financial protections - he simply cannot provide reassurance that he can hold his position overseeing the country’s international financial dealings without having a conflict of interest and therefore he shouldn’t be in the position he’s in.

I believe MP’s can ask to be excused from elements of their role or certain votes because of a conflict of interest. He can’t do that as exchequer.

It does matter to many people though.

Which changes my mind not one whit. I don't care what it looks like. I care what it does.

And in this instance there is a bagload of bollocks that needs to be addressed and all this whittering about 'optics' and 'loopholes' when talking about the legal application of laws, is just another distraction that will waste time and change nothing.

When SM and thegeneral media start discussing real abherrations with as much noise and chatter something might actually change.

Firstly they don't live in Downing Street, I think they have retained their private residence which is in North London (George Osborne also did this as did Savid Javid )

They own multiple properties in London but Rishi Sunak, his wife and children live in the flat above 10 Downing Street. They extensively redecorated last year with their own money. Must have learned some lessons from Boris.

@Volhhg

Do you not have to pay 30k a year for non Dom status? I think then it is "just for the rich"

Up until you're here for 7 out of the last 9 years I believe you don't have to pay anything to be non-dom. She has been here 7 years so is now paying £30k to retain her non-dom status, she'll have to pay £60k annually if she is classed as being her for 12 out of the last 14 years, and if she's still classed as being here for 15 years out of the last 20, she'll have to pay tax on her worldwide income, as I understand it.

The Sunaks absolutely do live in Downing St.

@Eleganz
I don't think you can say that the retention of the remittance basis is politically expedient! You can see from this thread how politically unpopular it is and the fact that this story has been leaked to smear Sunak shows what the public reaction is expected to be. Most people don't have much goodwill towards rich foreigners and would be quite glad to see them taxed more highly. I do think the rationale is economic rather than political.

I don't necessarily agree with the rationale I've given in full. However, whatever you think about trickle down economics (probably outside the scope of this thread), non-doms are a slightly different and extreme case. I tend to agree (say) that cutting the top rate of income tax in general wouldn't benefit the population as a whole, while raising it a bit isn't going to result in many additional rate tax payers leaving the UK when they are well established here.

But non-doms are, almost inevitably due to their status, internationally mobile. And there would be such a cliff edge for some of them in losing the remittance basis that they would potentially have to pay millions to stay in the UK if the regime was scrapped - this would be enough to make many of those who would otherwise pay the most UK tax leave. Non-doms claiming the remittance basis include a small number of people who bring very substantial (billions of) economic benefit to the UK in terms of running businesses here and creating employment and I do think that that has trickle-down benefits. (There are, of course, many who don't bring these sorts of benefits too and just buy up expensive property in London). From my own experience with clients, business people will make decisions about where to establish their businesses and where to live partly based on tax considerations. For example, since the US's tax regime became more attractive and our corporation tax rate went up, we've seen less willingness for businesses to relocate to the UK and more businesses looking to leave. Most countries try to shape their tax regimes with a view to encouraging foreign investment and businesses to relocate or establish themselves there and the remittance basis rules are part of that, though arguably they could be more targeted. The UK economy has historically been quite open to foreigners and viewed as an attractive place to establish a business and I think that overall that has benefited the UK population.

The policy question is whether you have a "fairer" system of taxing all UK residents on foreign income regardless of where they are domiciled, even if you don't raise more tax revenue or potentially raise less tax revenue by doing so.

She is doing nothing wrong. A non story.
My business has branches in a few different countries around the world. My company pays tax in each country relative to the turnover it makes in each country. Why on earth would my company branch in Canada pay the taxes due from that branch in the UK? We pay UK taxes on the income earned in the UK branch.

People love to make a mountain out of a molehill. If anything she is living in the UK, paying UK council tax, spending her money in the UK and contributing to VAT and the economy here. She probably spends far more money in the UK than you or I

No one begrudges any other wealthy person or MP for paying taxes in other countries. Look at Zac Goldsmith- he doesn’t even pay UK taxes but no one says anything about him. Oh wait, he’s white and male

@tigger1001

"That's not true, though, is it? She isn't someone residing in the UK whose PERMANENT HOME, or domicile, is abroad. She is married to a UK secretary of a state and her permanent home is here."

Do you know that? Is she planning to live in the uk forever? Is she planning to return to India when her husbands political career is over?

If her domicile of origin hasn't changed, then she is entirely following the tax rules.

Oh well then, let anyone who lives here who was born abroad pay no tax. As if.

It's a scam and you know it.

In case you think I'm specifically anti Sunak and pro Johnson, you would be wrong.

This should not be allowed to happen. You may disagree, but just look at the press, and social media. Nobody else does. If he can't see that himself, he's in the wrong job.

Hopefully Sunak is toast now that the story about the Green Card has come out.

Screaming misogyny and racism does not detract from the fact that they are a pair of greedy bastards, grubbing around in the tax system to save money they don't even need.

@Fretfulmum

No one begrudges any other wealthy person or MP for paying taxes in other countries. Look at Zac Goldsmith- he doesn’t even pay UK taxes but no one says anything about him. Oh wait, he’s white and male

What??? Literally go Google the phrase ‘zac goldsmith tax’. You’re trying to tell me there is nothing?

@Fretfulmum "........My company pays tax in each country relative to the turnover it makes in each country...."

Your company pays tax in** the jurisdiction it operates in.
I'm sure the companies Akshata Murty is involved with pay their taxes too.
But it is her personal taxation decisions on her various investments and shareholdings that people are concerned with on this thread.

Personally I believe if someone is living / working, bringing their children up in a country they should contribute to that country and its society as a whole.

I believe in a just and fair society.

I don't think this is a race issue for the public, even though it's true racism and misogyny are sadly rife.

At one stage I was hoping he'd knock Johnson off his perch, and even now I suspect that the Johnson crew possibly had a hand in the exposes. But you can't have this from ministers. And definitely not one in his job. It's a green light for everyone else to avoid more tax.

[quote LadyEloise1]**@Fretfulmum* "........My company pays tax in each country relative to the turnover it makes in each country...."*

Your company pays tax in** the jurisdiction it operates in.
I'm sure the companies Akshata Murty is involved with pay their taxes too.
But it is her personal taxation decisions on her various investments and shareholdings that people are concerned with on this thread.

Personally I believe if someone is living / working, bringing their children up in a country they should contribute to that country and its society as a whole.

I believe in a just and fair society.
[/quote]
She’s not paying ‘zero’ tax though? Just not ‘as much’ as people think she should.
And since it’s inherited wealth the majority of her estate planning, including being domiciled in a tax haven etc will have been done WAY before she even met Sunak. These people are globally mobile anyway.

We KNOW that Sunak doesn’t give a . We also know that every single person elected in the Tory party will have done similar, or worse.

Compared to giving billions of taxpayer money away to Dido Harding, and giving mates contracts. What his wife does with her income is lower down my priority list.

Responding to the chancellor's claims that Labour was unfairly smearing his wife, a Labour source told the BBC: "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."

Gets more interesting.