Akshata Murthy has non-domicile status which saves him tax in Britain on dividends from his Indian business. Daughter of Infosys co-founder Narayana Murthy, she owns around 0.93% of the company
Akshata Murthy reportedly used non-domicile status even after her husband Rishi Sunak was tasked with setting taxes for the country in February 2020. AFP
There is yet another controversy surrounding Akshata Murthy, the daughter of Infosys co-founder Narayana Murthy and wife of UK Finance Minister Rishi Sunak. Akshata, it has been revealed, has claimed non-domicile status in the UK.
What does non-domicile status mean? And how did Akshata Murthy benefit from it? We take a look.
The non-domicile status would save Murthy on his tax bill.
It owns around 0.93% of Infosys with an estimated value last month of over £500 million (Rs 4,960 crore). She also has interests in several companies in the UK. The tax status means she does not have to pay tax in Britain on dividends from the Indian company.
Murthy reportedly used non-domicile status even after Sunak was tasked with setting taxes for the country in February 2020. It’s unclear how much she benefited from tax savings, but it could have saved her some million pounds in foreign tax. income over several years, reports The Independent.
According to BBCMurthy pays overseas taxes on his foreign income.
Did Akshata Murthy break any laws?
Saving taxes through non-domicile status is optional. However, it is not illegal. This can save an individual from paying UK tax on income from dividends from overseas investments, rent on overseas property or bank interest. The status also means you avoid UK inheritance tax, the Independent says the report.
Murthy’s spokeswoman confirmed that “Under UK law, Ms Murthy is treated as not domiciled for UK tax purposes”. “She has and will continue to pay UK tax on all her UK income,” she said.
“Akshata Murthy is a citizen of India, the country of her birth and that of her parents. India does not allow its citizens to simultaneously hold the citizenship of another country.
Sunak under fire
Murthy’s prized tax status was reported in the UK media and drew criticism from opposition parties in the UK as the country raised taxes for millions amid the cost crisis of life.
Tulip Siddiq, an MP and Treasury spokeswoman for the opposition Labor Party, said Sunak should reveal “how much he and his family have saved on their own tax bill”. “The Chancellor has imposed tax hike after tax hike on the British people. It is stunning that – at the same time – her family have been able to benefit from tax cut schemes. This is yet another example of the Conservatives thinking that it’s one rule for them, another for everyone else,” she said.
Sunak became finance minister in February 2020 as the COVID-19 pandemic hit the country. With soaring inflation, the purchasing power of British households has taken a hit with falling living standards. Sunak faces a great economic challenge and to help rebuild public finances he has increased the tax take to the highest level since the 1940s.
Was the government aware of Murthy’s status?
A person familiar with the situation said Sunak declared his wife’s status to the government when he became minister and the Treasury Department was also informed, Reuters reports.
A government source said BBC“His (Murthy’s) domicile status is a matter of fact/law determined by his specific circumstances (domicile at birth),” but added that they would not comment further on an individual’s tax status.
However, this is not the first time that Sunak has come under fire for his wife’s financial interests.
Last week he came under fire for the Murthy family’s business ties to Russia. Sunak said he had “nothing to do” with Infosys. His spokesperson also said Akshata Murthy had no involvement in the company’s operational decisions.
Infosys “urgently” closed its office in Russia following the controversy.
According to a Guardian report in 2020, Murthy is a shareholder in a catering company that channeled investments through a letterbox company in the tax haven of Mauritius. This could allow him to avoid taxes in India.
Murthy married Sunak in 2009. She was born in India in 1980 and continues to be an Indian citizen.
With contributions from agencies
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