Labour has suggested Rishi Sunak could have broken the ministerial code by failing to be transparent about the non-dom tax status of his wife.
Emily Thornberry, the shadow attorney general, raised the prospect after Sunak gave an interview to the Sun newspaper acknowledging his wife, Akshata Murty, was a non-dom, meaning she does not legally have to pay tax in the UK on her income earned abroad.
Sunak has been under pressure for two days over his wife’s tax status, and is still refusing to say where she pays tax on an estimated £11m of overseas earnings.
The chancellor told the Sun: “She loves her country like I love mine,” and said his wife had done nothing wrong in choosing a financial arrangement that legally exempted her from paying tax in Britain on foreign income.
Asked whether he blamed Labour for what he called awful smears against his family, Sunak replied: “Yeah.”
But Thornberry told the BBC: “We want to know whether the chancellor, well we know that the chancellor didn’t declare it properly. It is in the ministerial code that the status of your spouse, the financial circumstances of your spouse are relevant and the reason is because there can be a conflict of interest.”
The Treasury has said Sunak declared his wife’s tax status when he became a minister in 2018. However, it is unclear whether he formally declared it to the Treasury when he became chief secretary to the Treasury in 2019.
Government sources would only say that the Treasury “was also aware, so as to manage any conflicts”, without saying on what date they were informed.
A Treasury spokesperson said: “The chancellor provided a full list of all relevant interests when he first became a minister in 2018, as required by the ministerial code. The independent adviser on ministers’ interests has confirmed that they are completely satisfied with the steps the chancellor has taken to meet the requirements of the code.”
Murty, a businesswoman whose wealth is estimated to be worth hundreds of millions of pounds, is an Indian citizen and is reported to hold a 0.91% stake in Infosys, an IT business founded by her father. Her share is thought to be worth £11.5m a year, meaning she may have avoided up to £20m in UK tax by being non-domiciled in the UK. Murty has said she pays tax overseas.
A report in the Times suggested unnamed allies of the chancellor had claimed the prime minister’s office was behind the leaks – an allegation No 10 and No 11 strongly denied.
A Treasury source said: “It is categorically not true that Rishi or anyone else in his team believe this is coming from No 10.”
A No 10 spokesperson told PA Media: “It is categorically untrue that No 10 is behind the briefings. The prime minister and chancellor are united.”
Sunak told the Sun that Murty was entitled to use the non-dom arrangement as she was an Indian citizen and planned to move back to her home country to care for her parents.
On Wednesday, Murty claimed the non-dom status was given to her automatically as an Indian citizen. But tax experts have said she would have to choose to seek the status each year. Murty pays £30,000 a year for having non-domiciled status, her spokesperson confirmed. The status will automatically cease once she has lived in Britain for 15 years – which would be in 2028.
The chancellor said it was “unpleasant” to read attacks on his wife “especially when she hasn’t done anything wrong”. “She hasn’t broken any rules. She’s followed the letter of the law,” Sunak told the Sun.
He said Murty “pays full UK tax on every penny that she earns here in the same way that she pays full international tax on every penny that she earns internationally”.
He said he would never dream of asking his wife to give up Indian citizenship for the sake of his political career.
He said: “I would hope that most fair-minded people would understand – though I appreciate that it is a confusing situation, that she is from another country.” He added: “These are her choices, right? She’s a private citizen, and of course I support my wife’s choices. She’s not her husband’s possession. Yes, he’s in politics, and we get that, but I think, you know, we get that she can be someone independent of her husband in her own right.”
Labour hit back at claims it was responsible for the leak, with a party source telling PA Media: “The chancellor would do better to look a little closer to home. It’s clear that No 10 are the ones briefing against Rishi Sunak and, after his failure to tackle the cost-of-living crisis, you can understand why.”
The Labour leader, Keir Starmer, said on Thursday that Sunak could be guilty of “breathtaking hypocrisy” if his wife was reducing her own tax bill as the No 11 incumbent increased national insurance for millions of Britons.
Murty confirmed her non-dom status after the Independent website first reported the arrangement on Wednesday, the day the 1.25-percentage-point rise in national insurance took effect.
It means her permanent home is considered to be outside the UK, despite the Sunaks living in Downing Street.
