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?

*Saving for your future isn't immoral. Especially if you are relying on investment income as that could easily disappear.

And given you said you are a doctor, you get a fair chunk of income that won't have tax on it due to your pension contributions.*

It is when it is used as a way to pay less tax.

When I retire from general practice my pension will be used for other things.

@SecretSpAD

*Saving for your future isn't immoral. Especially if you are relying on investment income as that could easily disappear.

And given you said you are a doctor, you get a fair chunk of income that won't have tax on it due to your pension contributions.*

It is when it is used as a way to pay less tax.

When I retire from general practice my pension will be used for other things.

The reason you pay less tax is to encourage saving.

Not everyone has the benefit of a superannuation scheme which saves you tax each month.

Ok. Here's another question - your accountant tells you you could save tax by making x as a gift aid donation. Or is that immoral too?

You’re missing the point @tigger1001. You don’t pay tax on pension contributions because the money is taxed when you take it out. If donations or gifts are made specifically to avoid tax it’s pretty unethical, you could always refuse the tax benefits attached.

Why does SecretSpAD have to justify themselves for not being corrupt inmoral?

@DuncinToffee

Why does SecretSpAD have to justify themselves for not being corrupt inmoral?

Because the world has actually gone mad.

Exactly. It’s lunacy.

@Blossomtoes

You’re missing the point *@tigger1001*. You don’t pay tax on pension contributions because the money is taxed when you take it out. If donations or gifts are made specifically to avoid tax it’s pretty unethical, you could always refuse the tax benefits attached.

No I'm really not.

The benefit of paying into a pension scheme is increased pension. The enhancement to encourage saving is a tax deduction if you are higher rate in your tax return.

It's only in the wonderful world of Mumsnet that saving for retirement is seen as immoral. No one does it solely for the tax saving - they do it increase their pension pot.

Most people don't have the benefit of superannuation pensions and want to maximise their pension pot.

When you employ 290000 people around the world the accounting is indeed a great deal more complicated than an individual’s.

Does she have an executive role or just a shareholding? Either way, that sounds terrible. If she holds shares in other companies such as a tracker fund then she might be responsible for employing tens of millions of people? How on Earth does she find the time? All the while single handedly creating the middle class in Bangalore. Patriotic support might be better if it at least maintained a tenuous link to reality.

@tigger1001 I have already said enough about my financial arrangements and have no intention of answering anymore of your goady questions.

For the last time I will state this - when you have as much money as my family does you don't care about pensions and I don't need to be "encouraged" to save.
What I do care about is paying my way in life and that means no tax dodges of either the legal or illegal type.
It is a privilege to have as much money as my family does and the very least we can do is pay our taxes properly.

HTH.

@DuncinToffee

Why does SecretSpAD have to justify themselves for not being corrupt inmoral?

She said it's immoral to put into a pension pot when you don't need it. But how do you know you don't need it? Especially if not on a final salary scheme.

The whole point of getting tax relief on contributions is to encourage saving.

I've never once heard pensions being described as imperial before and wondered if they felt the same way about gift aid donations. Same effect in tax return for a higher rate tax payer.

In real life people take advantage of schemes to save tax on a daily basis. Pensions/gift aid/isa's and plenty more. Most people would chose to maximise tax savings legally if they can. Doesn't make them immoral.

@tigger1001

SPAD clearly said saving for a pension you don’t ‘need’ is immoral - not that all pension savings are immoral fgs 🙄

Yes exactly. SPAD was obviously answering in respect of their personal circumstances. Refreshing to hear of very wealthy who choose not to amass
even more wealth when there is no need. Genuinely why do mega wealthy feel the need to get richer and richer?

[quote Merryoldgoat]@tigger1001

SPAD clearly said saving for a pension you don’t ‘need’ is immoral - not that all pension savings are immoral fgs 🙄[/quote]
But we don't have a crystal ball into the future.

And as someone else said it's taxed on the way out. So I struggle to see why it's immoral. As a basic rate tax payer it's not likely an issue I will have to worry about but it's the first time I have ever seen a pension contribution, that would be taxed at some point, be called immoral.

She could have said it wasn't for her. She feels her pension pot is enough. But immoral is a strong judgement.

I really am just wondering why she feels that way really.

For me, as along as people pay the correct tax, using any reliefs etc that are legally available to minimise their tax then I'm ok with that. I don't get to judge what others pay into their pension or what capitals gains tax reliefs they take advantage of etc.

I just find it interesting as most don't see pensions/gift aid/isas etc as avoiding tax generally. But here we have someone who strongly feels the opposite to that. I'm interested in their views - would they stop tax relief for pensions if it was up to them? Keep it at basic rate relief only? Decrease the amount you can pay into a scheme?

It was the word " immoral" that got me.

tigger1001 I agree with you, I had to read the last two pages twice to check, as I couldn’t fathom why or how anyone would state paying into a pension is immoral. In any case the rules around pensions already account for any “abuse” or unfair advantage to top earners, in the form of the lifetime allowance and the annual allowance. So very high earners are already capped on how much they can pay into pensions, both annuallly and total accumulation. There is nothing immoral about paying into a pension - it’s deferring the tax payment until you withdraw the money in the form of a pension, at which point, apart from a limited tax free lump sum, it’s taxed at one’s marginal rate. I think it is a very equitable and fair system. And not immoral.

What part of it’s immoral to take the tax advantages of paying into a pension if you don’t need to are you guys finding so difficult?

I really wish people would read what I wrote. I'm all for people having pensions, however I, and my family, will never, ever need one.
Therefore for us to use paying into a pension to save a bit of tax it would be immoral.

Fucks sake.

@SecretSpAD

Your meaning was perfectly clear. I honestly think people wilfully misunderstand others sometimes.

Unnecessary for you perhaps but surely not “immoral”. It’s a very strong word. Or maybe we just disagree on the gravity of that word, as opposed to the tax choice itself. Otherwise where would you draw the line on the morality of other tax allowances, do you also find the PAYE personal allowance immoral when higher earners benefit from it (up to the point it tapers off)? You probably don’t need it… Would you find it immoral
to use the dividend allowance on your dividend income, which you will rely on in lieu of pensions, assuming your dividends aren’t already wrapped in a tax efficient vehicle like an ISA. Please don’t answer any of this of course but do you see how it’s strange to brand one part of the legitimate tax system as “immoral” for you to benefit from, but not others? To other posters I’m not being goady, I’m genuinely intrigued where you draw the line.

I’m genuinely intrigued where you draw the line

You’d understand perfectly if you read what’s written instead of what you think is written.

@annabelindajane. I most certainly am not on my high horse— I was being factual— British citizens like Elton, Paul McCartney and David gilmour Pay uk taxes on worldwide income— non Dom was a choice Sunaks missus made as she is domiciled here most of the year and I can see no logical reason for that, other than to pay less tax than she would in the UK!! If she had paid it all in India there might have been some logical tax reason — but at no point has anyone categorically said it was all paid in India on those dividends. What she has done isn’t illegal here, but it’s a very very bad look for the chancellor to have his wife embroiled in tax avoidance schemes. I don’t quite get why you think it's so ok? Are you or your partner non Doms for tax purposes? You seem very defensive.

Ok so just pensions then? No other tax breaks or allowances are immoral?

Actually I will change the wording there— from tax avoidance schemes to ‘benefitting from legal but dubious loopholes ‘

@Merryoldgoat thank you. I'm a bit stunned at some of the responses to a comment I made about my own tax affairs to be honest.
I will not be responding to those posters further.

I personally use every trick I can legally do to avoid tax - including pensions and gift aid. The latter means my earned money goes directly to causes that I think are deserved.

The government are profligate, and inept. I’ll not give them funds unnecessarily for their vanity projects and so they can create insane schemes like ‘Help to buy’.

Some may think I have no moral or ethical right to decide this and should hand it over to Let those fine minds decide. My moral code says different.

All that means is that there’s no way Sunak and his wife should have backed down. They were legally in the right.

However

There’s no way he should be in the job in the first place either. He clearly doesn’t have much moral fibre to begin with - but it was the voting public who made him an MP. When I vote - I check the background of each candidate. I write to them and ask them a variety of questions.

Invariably, this ends up with me spoiling my vote because I’m either ignored or get a set of stock answers with little to know substance.

We get the people in power we deserve it we don't do due diligence.