ALEX BRUMMER: This fuels the idea that tax is for the little people
News about Rishi Sunak’s wife’s finances just fuels the idea that taxes are for little people… What makes it so damaging is that it fits into a familiar narrative that the ‘rich are different’, writes ALEX BRUMMER
No British Chancellor since the 1940s has presided over such monumental tax rises as Rishi Sunak.
So it comes as a huge shock to ordinary taxpaying citizens and small businesses nationwide to learn Mr Sunak’s heiress wife, Akshata Murty, who was born in India, has made the choice to be a non-domicile for tax purposes.
In so doing Miss Murty, daughter of one of India’s richest tech billionaires, is breaking no laws.
But by choosing non-domicile status, when she could opt to pay UK taxes on overseas earnings, she is setting herself apart from the vast majority of UK residents.
Non-domicile status has been available to the offspring of overseas-born fathers since Victorian times.
Depending on how long the applicant has lived in Britain, non-dom status can be ‘bought’ from HM Revenue and Customs for between £30,000 and £60,000 a year.
Rishi Sunak’s heiress wife, Akshata Murty, who was born in India, has made the choice to be a non-domicile for tax purposes. Pictured: Chancellor Rishi Sunak and his wife Akshata Murthy
Chancellor Rishi Sunak’s wife Akshata Murthy (pictured together at their wedding) has shares in her family’s tech business worth £430million, making her richer than the Queen
In modern times, it has been seen as a device to make Britain an attractive destination for the super-rich around the world – including now-sanctioned Russian oligarchs – by allowing them to shield their overseas income from onerous taxes in the UK.
What makes the disclosures about Miss Murty’s tax affairs so damaging is that it fits into a familiar narrative that the ‘rich are different’.
Or as the notorious American hotelier and socialite Leona Helmsley once put it, ‘taxes are for the little people’.
By ring fencing her income from a 0.93 per cent stake (worth £713million) in her father’s company Infosys, Miss Murty is able to avoid regular UK dividend taxes and a future capital gains tax in Britain should she ever decide to sell her personal shares.
The problem for the Chancellor and his wife is not her extraordinary wealth or even her non-domicile status per se – but how bad it looks to the rest of us.
Yes, Miss Murty is a private citizen but she is also married to one of the most senior figures in government and a man who owes his position to the voters who elected him.
Akshata Murthy, whose father is one of India ‘s richest men, faces scrutiny after it emerged she has kept non-dom status despite living in 11 Downing Street with Rishi Sunak and their children
Britons have been through hard times after real incomes (wages adjusted for inflation) barely rose in the years of austerity which followed the 2008-09 financial crash.
Now they are being battered by a cost of living crisis as a result of surging gas and oil costs.
So the timing of revelations about Miss Murty’s tax arrangements could not be more embarrassing for the couple while the outrage it has triggered is understandable.
This is the week, after all, the new health and social care levy – a 1.25 percentage point surcharge on every working person and employer in the UK – came into effect.
Rishi Sunak, until recently regarded as a national hero for the generous support provided to British workers during the pandemic, has seen his popularity crashing to earth with a bang.
As the Daily Mail reported this week, his popularity ratings have dropped 24 points since the Spring statement, while a YouGov survey found more than half of Britons view him ‘unfavourably’.
These recent revelations have dealt a devastating blow to the once popular occupants of No 11.
Source: Read Full Article