New Delhi. Akshata Murthy, wife of British Finance Minister Rishi Sunak and daughter of Infosys founder NR Narayana Murthy, has been embroiled in tax disputes. Akshata is of Indian origin. According to a report, Akshata is richer than Queen Elizabeth. Murthy is not liable to tax the UK on income earned abroad due to its non-dom status. It is being told that due to these controversies and rising consumer prices, the popularity of the craze has diminished. It is being said that Murthy has hidden his foreign earnings from the British tax authorities and has not paid proper tax. Significantly, Murthy has a stake in her father’s IT business based in India, from which she earns £11.5 million annually. They are said to have not paid UK tax on dividends at the rate of 39.35 per cent. According to one report, a person earning that much without non-DOM status in the UK paid around £5 million in income tax in the UK last year, plus another £250,000 in national insurance contributions. Her husband’s national insurance costs are said to have increased by £150,000 or more if he had not declared himself a non-dom in taxation.
What is non-domicile status?
Non-domicile, or non-dom, is a British tax status, which has been in place since the French Revolution. This means that a person who was born in another country, or that their parents are from another country, will only have to pay tax in the UK on their UK income. In this, under government regulations, people may be granted non-DOM status, meaning the UK is not considered their permanent home provided they live in the country but also intend to return to their home country. After the amendment in 2015, this process became more complicated. Non-DOM has been limited to 15 years, which effectively reduced the number of people claiming non-DOM status. Now only very rich people can take advantage of this. Many move out of the UK after age 15 for five years, and then return and claim 15 years of non-dom.
What is the issue of Akshata Murthy?
Murthy’s spokesperson said in a statement that being an Indian citizen has helped him attain non-DOM status. Akshata Murthy is a citizen of India, where she was born and where her parents reside. India does not allow its citizens to hold the citizenship of another country. According to British law, the statue is considered a non-resident for UK tax purposes. The report mentions that she has always been paying UK taxes on all her UK income. Akshata is a tax resident in the UK as she lives there. Whereas the truth is that he is an Indian citizen. After which Sunak supported the point saying “That’s her family…’ That’s the place, you know, she would like to take care of her parents when they get old.” Let’s say, having lived in the UK for seven of the last nine tax years, he will have to pay a fee of £30,000 to maintain non-dom status, which is what Murthy does. After 12 of the last 14 tax years, the fee is £60,000. And once someone has lived in the UK for 15 years, they automatically become residents there. It is said that Murthy had gone to the UK in 2015.