Kwasi Kwarteng defends Chancellor's wife on non-dom status
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After it was reported that Rishi Sunak’s wife Akshata Murthy does not pay UK taxes on the money she earns abroad, owing to her special “non-dom” status, Kwasi Kwarteng praised the couple for being “completely transparent”. The business secretary then echoed his fellow cabinet member’s sentiments by reiterating that Murthy was “a private citizen” not under the same limelight as politicians.
Speaking to BBC, he said: “As far as the Chancellor’s wife is concerned, I think her position was very clear and the chancellor has always been very transparent and open.
“She’s got non-domicile status, which effectively means that on your UK income, you pay taxes in the UK but on income abroad, you pay taxes in those foreign jurisdictions.”
The BBC host was then quick to point out that though there was no evidence of illegal behaviour, that this had emerged on the day of National Insurance hikes was not a good look for a Government so concerned with appearance.
The presenter said: “No one is suggesting she’s done anything wrong, but it’s just about the optics, especially at a time when your Government takes optics so seriously.
“It doesn’t look good.”
Kwarteng responded: “Well people can draw their own conclusions. I was very interested in the transparency. It is very clear to me what has happened.
“The chancellor has been very honest and very clear. And [Murthy] is, after all, a private citizen. She is not a politician.
“I think her affairs were completely transparent and there’s not a hint of wrongdoing at all, so I think everything is in order.”
While Sunak has not yet spoken on his wife’s “non-dom” status, he has recently described attempts to criticise her as not “fair game” over her seismic stakes in a company that kept its offices in Moscow after the Russian invasion of Ukraine
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Murthy, who married Sunak in 2009 after meeting at Stanford University, is the daughter of billionaire NR Narayana Murthy, 75.
She holds a 0.91 percent stake in her father’s former technology company, Infosys, and received £11.6 million in dividends in the past tax year from that ownership.
But her “non-dom” status means that she did not have to pay UK tax on the dividend at a rate of 38.1 per cent, though she has reportedly paid foreign tax on all foreign earnings.
Her father’s Indian citizenship is the reason she enjoys “non-dom” status, since, she claims, India will not allow her to hold dual nationality.
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But experts have claimed that Murthy’s citizenship status is her choice, not something beyond her control.
Nimesh Shah, chief executive of the accountancy firm Blick Rothenberg, said: “If you state in a tax return that your intention is to live in the UK and you’re not going to go back to your country of origin, you will be considered British for tax purposes, and you’ll lose your domicile of origin.
Ms Murthy lives in No 11 Downing Street with her husband and two daughters, Krishna and Anoushka, where she is believed to spend most of her time.
The Treasury, however, has defended the chancellor and his wife’s situation, saying that the “prime minister’s independent adviser on ministerial interests has confirmed he is completely satisfied with the chancellor’s propriety of arrangements”.
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