Chancellor Sunak's wife is non-domiciled for tax purposes

The wife of Britain's chancellor of the exchequer Rishi Sunak is treated as non-domiciled for UK tax purposes but pays taxes in Britain on all her UK income, her spokeswoman said on Wednesday.

Akshata Murthy is the daughter of Narayana Murthy, the billionaire co-founder of IT services company Infosys, and she owns around 0.93 per cent of the company. The tax status means she would not pay taxes in Britain on dividends from the Indian business.

The news comes as the government is putting up taxes in for millions of people. Tulip Siddiq, an MP and Treasury spokeswoman in the Labour Party, said Sunak should say whether he had benefited from his wife's tax status.

Murthy's spokeswoman said as a citizen of India, Murthy was treated under British law as non-domiciled for UK tax purposes because India does not allow its citizens to hold the citizenship of another country simultaneously.

Sunak, who became chancellor in February 2020 just as the country entered the COVID-19 pandemic, is now facing some of the toughest economic conditions in decades, with inflation soaring and living standards set to drop to levels last seen in the 1950s. Read full story

To help fund the rebuilding of the country's national health service and its public finances, he has increased the tax take to the highest level since the 1940s.

"Akshata Murty is a citizen of India, the country of her birth and parent's home," the spokeswoman said in a statement. "India does not allow its citizens to hold the citizenship of another country simultaneously.

"She has always and will continue to pay UK taxes on all her UK income."

A person familiar with the situation said Sunak had declared his wife's status to the government when he became a minister and the Treasury department was also informed. The person who asked not to be named due to the sensitivity of the matter added that Murthy pays foreign taxes on her foreign income.