We must all feel sorry for Rishi Sunak and his partner Akshata Murthy. I believe they claim to be married. Ms Murthy comes from a very wealthy Indian family and has a small shareholding in her father’s company which provides her with dividend income of, according to some sources, £11,500,000 per annum. This is a reasonably substantial yearly income.
She is registered in the UK as a non-domiciled person for tax purposes, which allows her to only pay tax on her Indian Income in India. and exempts her from paying tax in the UK, even though she lives in a government provided accommodation with her husband in the UK.
If she brings money from abroad into the UK then she pays the appropriate tax on that income. In order to maintain non-domiciled status, given the level of her income, she pays around £30,000 per annum flat fee for the privilege, and confirms that at some point it is her intention to return to her domicile of India. In other words she has no intention of making the UK her permanent home.
If she pays tax on that dividend income in India she’d be left with approximately £9.2 million. If she paid UK tax on the remaining dividend income, she’d be left with approximately £5.6 million, which mean that she would have paid just under £6 million in tax on that £11.5million. That is quite a lot of money, but with a remaining income of over £5 and a half million a year, I believe she can get by, particularly as he pays no rent. I’m not sure if she even has to pay council tax.
Of course I can see the advantage of paying £30,000 per annum plus a few additional amounts on the money she brings into the UK from abroad, but she will certainly be keeping a large part of the £9.2 million or so she has left after Indian taxes, assuming she actually pays a full 20% tax on dividend income in India.
Since she does not actually toil for the dividend income, so far as I know, it seems fairly easy income to receive. In which case, I would think, the actual amount of the dividend does not have an emotional attachment, or connection with earnings related to actual work performed. So the amount itself can hardly matter, considering its size. Therefore whether it be £9 million per annum or £5 million per annum, cannot really mean that much to her, and she would have the added bonus of realising that she was making a substantial contribution to her domicile as well as her husband’s domicile, where she chooses to actually reside. After 10 years she might even have saved enough out of £50 million to retire to a nice bungalow near the seaside.
I wonder though, if it is in fact her stated intention to return to India at some point, does that mean that Rishi is of the same mind? Should we not be told if the Chancellor of the Exchequer actually intends to remain in the UK, or is this just a hobby temp job before returning home. If she really has no intention of returning to India, then clearly the non-domicile status is a sham and she should be ashamed.
We are talking about a yearly income of a substantial amount of money, which if properly taxed, could alleviate the additional tax burden on a number of families whose net income in a lifetime would not amount to what she could pay in taxes for one year, without feeling a pinch. She will never have to go near a food bank, she will never even have to save as the money rolls in year on year.
I suppose the company could go bust, but if she hasn’t salted away a substantial contingency fund by now, why is he Chancellor of the Exchequer. Also one wonders how she and Rishi spend £10 million a year. That’s over £27,000 a day. If they had five servants – cook, cleaner, chauffeur, secretary, personal maid - at a salary of £100,000 per annum each, that would still leave them with £25,000 a day for expenses.
The point is, allowing her to have this sham tax status of non-domicile, is an insult to the ordinary British taxpayer, and the height of hypocrisy for Rishi Sunak to complain about comments over his and his wife’s taxes. Or perhaps they are not married at all and lead completely separate lives, in which case we should all feel sorry for poor Rishi Sunak.
Of course I may be wildly out of line with the figures, in which case I will feel wildly sorry for Rishi Sunak.
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