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?

The whole thing is looking extremely fishy

From dishy to fishy.

"All Ms Murthy's monies are rightfully earned and properly taxed in the country where it's earned."

People keep writing this. All I've read is that she pays international tax - not Indian tax. The implication is that it's funnelled to a tax haven like Mauritius where tax can be minimal.

Akshata pays taxes towards the country that helped her parents build Infosys. As she should.

Apparently not, given her use of a Mauritius tax haven.

Her father started his life in poverty and by dint of hard work has raised himself up

Guff.

He was born into a comfortably off middle class Brahmin family who could afford to educate him privately and send him to university.

[quote Watchamocauli]@ancientgran

Prove it where she lied. She is paying taxes to the country where she is earning it.

You want to fill UK Coffers with Indian earned company? Shame on you

Infosys has 229K employees worldwide. My family and friends work there so no their hard earned dividends are not for UK TAX coffers[/quote]
The first statement was that it was just one of those things, she's Indian so she is non dom. It wasn't true, she applied for non dom status it didn't just automatically happen.

From The Independent A spokesperson for Ms Murthy said: “India does not allow its citizens to hold the citizenship of another country simultaneously. So, according to British law, Ms Murty is treated as non-domiciled for UK tax purposes. She has always and will continue to pay UK taxes on all her UK income.

So unless you think her spokesperson said that without her permission she lied as tax liability is nothing to do with her not having British citizenship.

Sunak continued that with the she loves her country, she won't cut ties with it. No one asked her to plenty of Indian people make their permanent home in the UK and don't claim non dom status and they probably still love India.

I wonder how she arranged her Indian taxes, did she pay them, did she pay a reduced rate as a non resident? It will be interesting to see what else comes out and also how the US views the green card situation.

@Notonthestairs

"All Ms Murthy's monies are rightfully earned and properly taxed in the country where it's earned."

People keep writing this. All I've read is that she pays international tax - not Indian tax. The implication is that it's funnelled to a tax haven like Mauritius where tax can be minimal.

Smoke and mirrors isn't it. They say something that can be interpreted how you like and the Sunak fans interpret it to say something it doesn't say.

I'm pretty certain that they'd have specified Indian tax if that is where she is paying it. Otherwise it's very sloppy wording.

I don't doubt it's legal and she's certainly not the only wealthy person to do it. I've read articles about how much Indian money is put through Mauritius to limit tax at home. Millions lost to their exchequer.

But to suggest that she's made a moral choice to pay in India is nonsense.

@Watchamocauli

She did not lie anywhere about her non Dom status. Proof it don’t just forth crap from twitter

Her spokesman said she had no choice but to be non dom. That is absolute rubbish. It's a status you can only gain if you apply for it, and if you keep it up by making the required payments.

@Notonthestairs

I'm pretty certain that they'd have specified Indian tax if that is where she is paying it. Otherwise it's very sloppy wording.

I don't doubt it's legal and she's certainly not the only wealthy person to do it. I've read articles about how much Indian money is put through Mauritius to limit tax at home. Millions lost to their exchequer.

But to suggest that she's made a moral choice to pay in India is nonsense.

Yes, if she is in fact paying full tax in India, her PR people need sacking. Because if she actually were doing that, shouting it from the rooftops would be her best line of defence. You can tell that because the bots and defenders are all trying to say that's what's happening.

[quote Watchamocauli]@ancientgran

Prove it where she lied. She is paying taxes to the country where she is earning it.

You want to fill UK Coffers with Indian earned company? Shame on you

Infosys has 229K employees worldwide. My family and friends work there so no their hard earned dividends are not for UK TAX coffers[/quote]
The employees have no choice about what happens to the dividends that shareholders are paid off the back of their work. In this case, they don't even go into Indian tax coffers given the use of tax shelters.

@Nennypops no it is not. You are confusing non-domiciled with the remittance basis.

Non-dom is a legal status which is not governed by you but by your parents domicile and the length of time you spend in the UK.

The remittance basis is a method of taxation, only open to non-doms, which you have to decide to claim year on year in your tax return. That is a choice, your non-dom status is not.

It's practically like she's a charity, Giving her hard earned money in tax to help the poor.

Are there poor in Cayman? There are some in Mauritius.

FWIW, I suspect the green card revelations and the implications of the expectations of what holding a Green Card means will cause more problems for the Chancellor. That and the competence in how the furlough money was distributed, both to the fraudulent and the millions of the self employed who were left high and dry.

And yes, the remittance basis is the one which comes with a charge after 7 years. No-one pays anything to be non-dom, in the same way I pay nothing to be UK-dom.

But to suggest that she's made a moral choice to pay in India is nonsense

As is the narrative that the UK wants to take the money out of philanthropic (billionaire) Indians and their employees mouths.

The sums of money being talked about are not going to bankrupt any of the companies involved, they’re barely a dent in their profits. Which is one of the reason, morally, it’s shady to go to so much effort (i.e any effort) to avoid tax liability. It’s even shadier when one of the beneficiaries of all this hoarding is in charge of our treasury and has denied national insurance relief for months in a time of cost of living sky rocketing.

Legality means very little when those making the laws are not beyond reproach themselves.

Non-dom is a legal status which is not governed by you but by your parents domicile and the length of time you spend in the UK.

Non-domiciled tax status is governed by the individual.

[quote Lockheart]@Nennypops no it is not. You are confusing non-domiciled with the remittance basis.

Non-dom is a legal status which is not governed by you but by your parents domicile and the length of time you spend in the UK.

The remittance basis is a method of taxation, only open to non-doms, which you have to decide to claim year on year in your tax return. That is a choice, your non-dom status is not.[/quote]
You seem to be missing the point. She has chosen to be non domiciled. The reason for this is to make use of the remittance basis open only to non dom indivuals. She could have chosen to be domiciled in the UK. She is married to the Chancellor, her kids go to school here, her family home is here etc etc. You are normally domiciled in the country you intend to permanently reside in. By carefully saying she intends to return to India one day she can choose to be non domiciled.

This from uk gov guidelines
When might HMRC challenge your domicile status?
5.22 We do not normally challenge any person who says they have a UK domicile. If you say you’ve a non-UK domicile, we might want to check whether or not that is correct, particularly if you were born in the UK.

5.23 By its very nature, a check aimed at establishing your domicile will be an in-depth examination of:

your background
lifestyle
your intentions over the course of your lifetime.
Any check of this sort will extend to areas of your life, and that of your family, that you might not normally think are relevant to your UK tax affairs. We will need to ask these questions and sometimes ask you to provide us with evidence about these areas of your life, as part of our check. This may involve meeting with you in person.

Love to know how many of us would pay tax that we didn't have to

@Hollyhead

To me it’s a non story - unless we expect politicians and their families to follow different tax laws than the rest of us? She’s not breaking any laws. It just highlights the gap between the rich and poor.

The maths of the article also doesn’t add up - I wouldn’t expect a dividend of 11.5m from a company only worth 690m, of which I had a 1% stake. You can only take dividend from profits so that would suggest a 1.15bn profit for the year which would make the company worth more.

You go Marty Byrde

Believe me if I had that much money I'd gladly pay. What the fuck would an individual need 500 million in dividends alone for?

@Nennypops

Non-dom is a legal status which is not governed by you but by your parents domicile and the length of time you spend in the UK.

Non-domiciled tax status is governed by the individual.

No it is not. The remittance basis is governed by the individual. They choose whether or not to use it every year in their self-assessment tax return.

Non-dom status is determined by law. You're either non-dom or you're not.

@mrshoho the part you've quoted is to check that you meet the conditions for non-dom status in law.

As I have said on this thread several times, the threshold for acquiring a domicile of choice in the UK is very very high and she will find it difficult to prove she intends to settle here indefinitely when she still has family in India.

This is to the UKs advantage, as the flip side of these rules mean wealthy UK citizens can't do a midnight flit to the Cayman Islands and immediately shed their UK-dom status and their UK tax obligations. They'd have to meet very very high thresholds to prove to HMRC they're domiciled in the Cayman Islands. But it does mean that those coming into the UK have to meet the same stringent tests in order to be considered domiciled in the UK.

Your domicile of origin is immutable and can never be displaced.

The remittance basis is seperate to your domicile status although you can only claim it if you are non-dom. The remittance basis is an election that must be made each year in your SA tax return and to which a charge is applied after a certain number of years.

Non-dom status is not a choice, it is determined by HMRC. Claiming the remittance basis is an annual choice.

From gov uk guidance.
Members of the UK Parliament and House of Lords
1.7 Members of the House of Commons (MPs) and House of Lords (Peers) are treated as resident and domiciled in the UK for Income Tax, Inheritance Tax and Capital Gains Tax purposes. This applies to the whole of each tax year in which a person is a member of either House. It applies even if that person is a member for only part of the tax year and regardless of whether or not they are on a leave of absence.

1.8 It does not apply to either the Lords Spiritual or peers who are disqualified from sitting and voting as a result of becoming a Member of the European Parliament or a judge.

You'd think our highly educated Chancellor would be up to speed on his government's policies. How did he not see the need to relinquish his green card?

I don't agree with what you are saying at all @Lockheart. Ffs after 15 years (if she stays that long) she will automatically be classed as domiciled in UK!!

@mrshoho

I don't agree with what you are saying at all *@Lockheart*. Ffs after 15 years (if she stays that long) she will automatically be classed as domiciled in UK!!

You can disagree with me all you want, I'm still correct. I've taken a not insubstantial number of exams to qualify in this area.

And you're misunderstood about the 15/20 rule either. If you are a non-dom who stays in the UK for 15 of the last 20 years, you become deemed UK-dom for tax purposes and you lose access to the remittance basis.

This is not the same as acquiring a domicile of choice.

5.22 We do not normally challenge any person who says they have a UK domicile If you say you’ve a non-UK domicile, we might want to check whether or not that is correct, particularly if you were born in the UK