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?

@EstelleCostanza

The English law of domicile is quite complicated. There is no single test. So I’m not quite sure where the thing about the father comes from. It is true the US will tax it’s citizens even if domiciled elsewhere. Hence people disclaiming their us citizenship when they don’t fancy paying taxes in a country they gave no intention of returning to

Is that why Johnson gave up his US citizenship?

I knew young men back in the 60s who did it as they didn't want to be called up for Vietnam. At least that was what they said, I suppose it could have been tax and it sounded cooler to be anti a war.

@daimbarsatemydogsbone
The US is quite aggressive in taxing non-resident citizens. The starting position is that they are charged to US tax on worldwide income from all sources. However that is subject to various exemptions e.g for foreign income and the application of double tax treaties with other countries. The reality is that as a US non- resident citizen who earns all their income outside the US you are unlikely to be liable for US tax. That’s a different issue though as it’s about how non- residents are taxed.

Citizenship is rarely relevant to the UK tax system. The starting position in the UK is that “UK residents” which can include non- doms are charged to tax on worldwide income and gains but again there are lots of exceptions to that including the application of our double tax treaties with other countries and the non- dom rules. Even UK domiciled residents tend to get tax relief in the UK if they have already paid foreign tax on the same amount.

Arguably the non- dom rules make the UK a relatively attractive jurisdiction for foreigners and there are arguments for reforming them e.g the effect is to attract foreigners to the UK but dissuade them from bringing their money here. But they are in place for economic reasons as a deliberate choice by parliament and non- doms still tend to pay a lot of UK tax overall.

Oh, and in theory we Yanks abroad have to pay $10 or more to efile, although I keep getting efile for free (no idea why). Or pay $12+ to photocopy & post our tax documents.

The individual states also want us expat Americans to file for any income that can be placed in that state, such as that $12 ... but again we won't owe, we're just obliged to do a lot of paperwork.

Costs $800+/year to get our taxes done professionally as expats.

I'm not minted so take chances of doing IRS forms myself

"But in this case a multi millionaire woman is using the get out."

Not sure it's a get out. She will still be paying tax on the income, just not in the uk. Which the law allows her to do. She can legally claim non domiciled status. She certainly won't be the only one.

Do you think her domicile should change on marriage?

*ancientgran

tigger1001

"The BBC are saying she can do this as her father was born in India, is she his chattel instead of her husband's?"

Domicile follows your fathers domicile generally. It doesn't change on marriage any more. Think it was the 1970's that changed.

So much for independent women. Claim to be daddy's little girl if it saves you money.*

Shes not claiming to be her fathers daughter, she is her fathers daughter. And the law currently states that your country of domicile is determined by your fathers country of domicile, in the same way as your country of citizenship is determined by your parents country of citizenship.

Now by all means complain that the law is sexist because it only takens into account your fathers country of domicile not your mothers.

But following this law doesnt make her any less of an independant woman just because the law is sexist.

Many women are given their fathers surname as their surname. Does that automatically make them less independant?

@ancientgran it's not a get-out, it's something that was set in stone when she was born.

She can't change her domicile of origin any more than you or I can.

Your domicile of origin depends on your parents and not where you were physically born. If your parents are married, your domicile of origin is your father's domicile. If your parents are unmarried, it is your mother's.

Yes I think that is why Boris disclaimed his US citizenship which he had by virtue of being born there. But obviously not lived there since childhood.

But in this case a multi millionaire woman is using the get out.

Tax is being paid. Does it help that India is receiving large chunks of this wealth in tax?

It’s a long time since I looked at the English law of domicile but I’m pretty sure your current domicile - which is what’s relevant here - isn’t determined by your fathers. Think that’s a red herring

Akshata Murthy is not a politician and stays away from the limelight. Why should she be singled out? It just reads like a witch hunt.

For those asserting the appropriate amount of tax will be paid in India, are you certain that there is no double Dutch or more recent tax optimising structure to the ownership and dividends payment so the 'appropriate' amount of tax does not approximate to zero some time in the future?

Imagine the stress this will cause Priti, Michael, Liz and everyone queueing up to defend the Chancellor today. Well, stress when they are not trying to meet donors and power brokers to compensate for one of the runners having a billionaire in their camp with all their corporate friends. Why did Teresa and Priti have a falling out, back in the day?

My take away from this story is:

Labour believe husbands should control their wives finances.

Labour have no idea how tax and the economy work.

Labour are trying to stir up class hatred because they have no properly thought out positive policies.

If they do not get their act together they will, once again, leave the field completely open for Boris and his British Nationalist party to walk away with the next election.

I also find the assumption that we should get the tax take rather than India pretty repellent.

Agreed. It's all quite Colonial.

[quote Lockheart]@ancientgran it's not a get-out, it's something that was set in stone when she was born.

She can't change her domicile of origin any more than you or I can.

Your domicile of origin depends on your parents and not where you were physically born. If your parents are married, your domicile of origin is your father's domicile. If your parents are unmarried, it is your mother's.[/quote]
This!

She must be paying tax somewhere. If someone is clearly resident in the UK though and using our public services they should be paying tax here.

@MarshaBradyo

But in this case a multi millionaire woman is using the get out.

Tax is being paid. Does it help that India is receiving large chunks of this wealth in tax?

Do you know how much tax she is paying in India? We don't even know if she is domiciled in India for tax purposes, let alone whether she is actually paying tax there, and if so, how much.

There are lots of tax avoidance schemes in India too. The very rich rarely pay a lot of tax.

'must be paying tax somewhere' I admire your optimism though to be clear, I have in mind the generic billionaire with scope to manage the geographic and temporal dimensions of revenue and taxation rather than any individual

@Electrox

I also find the assumption that we should get the tax take rather than India pretty repellent.

Agreed. It's all quite Colonial.

I don’t necessarily think the tax should be paid here, what I do think is that someone benefitting from what, is for all practical purposes a complicated tax set up, to the tune of millions of pounds annually shouldn’t be entangled with a senior member of the cabinet. Certainly not one that is in control of millions of peoples financial security and tax laws.

It might be legal, it’s not morally right though. It’s also either fucking stupidity or complacency rooted in arrogance to think that this wouldn’t be an issue. Gary Barlow and Jimmy Carr didn’t escape scrutiny for taking advantage of perfectly legal tax directives, why would the Sunak’s not think their set up would be any different?

@EstelleCostanza

It’s a long time since I looked at the English law of domicile but I’m pretty sure your current domicile - which is what’s relevant here - isn’t determined by your fathers. Think that’s a red herring

That’s true , you can change your domicile but the assumption prims facie is that unless you apply to change it your domicile is related to your parents ( usually fathers ) domicile. The fact that she was born in India, the bulk of her assets are in India, her nationality is Indian, she holds an Indian passport means that frankly her domicile is India, the fact that she is married to an Englishman should not change that .

Two of my siblings are married to non U.K. citizens, both of whom have retained their domicile of origin. I gave neices and nephews who have the U.K. as their domicile of origin and who are non U.K. domicile .

We're all in it together and a millionaire Chancellor with a billionaire wife will be able to empathise with those who don't have the money for food or heating just as much as someone who grew up on benefits, if not more. It's discrimination to suggest otherwise. It's also why MPs must be paid more as there are some jobs where if you pay peanuts then you get moneys. Like MPs. And the City. Not the NHS and care workers.
they get claps.

And just look at the 5p cut in fuel duty and the 2024 tax cut before the election to see how the Chancellor is moving heaven and earth to satisfy his electorate.

Jolyon Maugham is holding forth on Twitter about domicile. It all appears to be very complex. He seems to be saying that domicile is not determined by your birth or citizenship.

I think the journalism on this has been very click bait. A lot of people seem to not understand the difference between tax planning and tax evasion.

As far as I am aware, she pays her tax in India, the country of which she is a citizen. Should we rob India of her tax contribution to them?

Indeed. Also, if the worst happens and she dies, the tax on her estate will legally (and morally) go to India? Why should UK coffers gain the most from such a large estate and not India?

Any tax lawyers on this thread who can weigh in?

wasn't this the tax loophole that Osbourne tried to close?

Also the UK has created this "loophole" as people call it to attract weather people
To live here and spend their mega wealth in the UK as an attractive prospect which in turn brings money to the UK.

This is very common within countries.
The media is sensationalising it like it's tax evasion which it's not.
However I agree with his wealth it's difficult for him to understand real life but that is a totally different issue.