By Gaggan Sabherwal
South Asia Diaspora Reporter, UK
15th April 2022
The last few days and weeks have been very challenging for UK’s Chancellor Rishi Sunak regarded as one of Britain’s most popular politicians, regularly overshadowing Prime Minster Boris Johnson. Many people, both within Rishi Sunak’s Conservative party as well as outside, predicted that it was only a matter of time before he becomes
UK’s first Indian-origin Prime Minister.
But the 41-year-old is quickly realising that nothing is permanent in politics, and nothing lasts forever. Mr. Sunak saw a steep rise in his popularity post his appointment as the country’s youngest chancellor in February 2020. Overnight his social media followers shot up and he was given the nick name ‘Dishy Rishi’. Rishi Sunak’s popularity soared even further all thanks to his rapidly drafted economic policies that kept the wages in the UK flowing during the corona virus pandemic.
(Photograph Credit : GETTY IMAGES)
Who is Rishi Sunak?
Rishi Sunak's parents came to the UK from East Africa in the 1960s and are both of Indian origin. His grandparents were born in Punjab in India.
Rishi was born in 1980 in Southampton in England where his father was a doctor, and his mother ran her own local pharmacy. Mr. Sunak said in an interview he admired his father's dedication to serving the community and helping his mother in her pharmacy gave him his first lessons in business. He is the eldest of three siblings.
It was in 2005, while he was studying for his MBA at Stanford University in California, that he met his future wife, Akshata Murty. After graduating from Stanford Rishi worked for Goldman Sachs and later as a partner at the hedge fund firms, The Children's Investment Fund Management and Theleme Partners.
Rishi was inspired by his parents who served and helped their local community and just like them he too wanted to make a positive difference in people’s lives and so decided to enter politics and become a Member of Parliament (MP). And it was in the 2015 UK’s general elections, Rishi Sunak was elected as an MP for Richmond in Yorkshire and served as a junior minister in former Prime Minister Theresa May's government. He was then made chief secretary to the Treasury by Ms. May’s successor, Boris Johnson and on 13th February 2020 he went on to replace Sajid Javid as UK’s Chancellor of the Exchequer (Finance Minister).
Who is Akshata Murty?
Akshata Murty was born in April 1980 to NR Narayana and Sudha Murty in the southern Indian state of Karnataka. Her parents initially took her and her brother Rohan with them when they moved to Mumbai for work - but soon decided to send them back to Karnataka to live with their paternal grandparents.
It was a year later in 1981 that her father founded Infosys, the IT company that would go on to make him one of the richest men in India. Forbes puts his net worth at £3.45 billion. Akshata’s mother Sudha Murty is a computer scientist and engineer and was the first woman to work for India's then largest carmaker TATA Engineering and Locomotive Company (TELCO). Mrs. Murty has also worked for Infosys and is now a philanthropist.
After completing her schooling in India, Akshata travelled to the US to study Economics and French. After stints at firms including Deloitte and Unilever she went to Stanford for her MBA where she met her future husband. They married four years later at a ceremony in Bangalore that was attended by a number of high profile and prominent personalities including India’s top cricketers.
The couple have two daughters.
Akshata’s business empire and wealth
In 2009 Akshata Murty founded her own fashion brand Akshata Designs, which saw her feature in Vogue in 2011.
Despite having her own business, it is her 0.9% share in Infosys that makes up most of her wealth, which is estimated at more than £400 million - higher than the Queen's (£365 million). Ms Murty is also the director of the venture capital business Catamaran Ventures UK, which her father started in 2010. Her husband Rishi was also a co-owner in this company but transferred his shares to her shortly before being elected as the Conservative MP in 2015. Ms. Murty is also listed as having shares in at least six other UK companies.
The couple are said to have at least four homes in the US and UK, including a five-bedroom property in Kensington in London valued at almost £7 million, as well as a £1.5 million Georgian mansion in Rishi’s North Yorkshire constituency. Besides this, they also have a beach penthouse in Santa Monica, California with an estimated value of £5.5 million.
So, what really went wrong for Rishi Sunak?
The popularity of the once much-loved chancellor has plunged amid continuing debate over the UK Government’s reaction to surging living costs. According to a recent public poll more than half of Britons (57%) have an unfavourable opinion of the chancellor, compared with 28% who view him in a positive light - (https://yougov.co.uk/topics/politics/articles-reports/2022/04/06/rishi-sunaks-net-favourability-down-24pts-two-week)
There are a number of reasons that may have caused a dip in Rishi’s popularity. But it is his and his wife Akshata Murty’s wealth that has grabbed attention and became the topic of media discussion. Unfavourable headlines such as - Richer than the Queen: Meet UK finance minister’s mega-wealth, Akshata Murty’, ‘Rishi Sunak under pressure over wife’s ‘blood money’ through family firm still operating in Russia’, ‘UK Chancellor Rishi Sunak in a fix over Akshata Murty’s Infosys dividends’, ‘Morals don't tax Tory leadership as it's one rule for us and another for them’ made things worse.
(Photograph Credit : GETTY IMAGES)
It forced Mr Sunak to publically defend his wife in a recent BBC podcast, where he said he was irritated at criticism of his wife for her shares in Infosys, as it emerged the company still had an office in Moscow despite Western sanctions.
The biggest criticism however came when it emerged that his wife was a “non-domicile”, that is not domiciled in the UK for tax on her overseas income. Akshata Murty received £11.6 million in dividend income last year from her shares in Infosys and as a non-domiciled UK resident she is not required by law to pay UK taxes on this income. Her spokeswoman also confirmed that Ms Murty pays all tax due in the UK, but the Labour party called for “complete transparency” on exactly where she does pay overseas tax.
What is a non-dom?
· A non-dom (non-domicile) is a UK resident who declares their permanent home, or domicile, outside of the UK.
· A domicile is usually the country his or her father considered his permanent home when they were born, or it may be the place overseas where somebody has moved to with no intention of returning.
· For proof to the tax authority, non-doms have to provide evidence about their background, lifestyle, and future intentions, such as where they own property or intend to be buried.
· Those who have a non-dom status must still pay UK tax on UK earnings but do not need to pay UK tax on foreign income. They can give up their non-dom status at any time.
But what do people make of all this?
Arvind Kumar, a 39-year-old IT manager from London says he doesn’t think Ms. Murty ‘’has done anything wrong as she is an Indian citizen holding an Indian passport and she pays taxes for her income she makes in India to the Indian government and so she doesn’t have to pay taxes in the UK for this reason’’. He further added that ’she is being penalised simply because she is married to UK’s chancellor’.
But many others were less than impressed.
Kimberly Gray, 65, from York told the BBC that, ‘’if Rishi and his wife are both living in the UK and are residents of this country then they should pay all their taxes here. Rules are meant for everybody, including the rich’’.
Labour Party’s leader Keir Starmer said that Rishi Sunak must ‘’come clean’’ about his wife’s non-domicile tax status. He went on to ask for clarity over why Rishi Sunak’s wife used non-domicile status. He further added that it would be ‘’breath-taking hypocrisy’’ if she had been reducing her tax liabilities while the chancellor was raising taxes on others.
The business secretary, Kwasi Kwarteng, on the other hand insisted that the chancellor and his wife had been “incredibly transparent” about the arrangement but was unable to say whether she paid tax on foreign earnings in India or another jurisdiction, such as the Cayman Islands.
Speaking to BBC Radio 4’s Today programme, he said: “She’s an Indian citizen. And so, she, as you say, pays tax here on UK income, but pays tax abroad on foreign income.”
The Liberal Democrats however disagreed with and the business secretary and the other people who have come out in support of the Sunaks and are calling for the chancellor to resign, with their leader Sir Ed Davey saying: "Never mind a green card; it's time to give Rishi Sunak the red card." His statement comes after a Sky News report that claimed that Mr. Sunak and his wife held US "green cards" permitting them residence in the United States until more than a year into his chancellorship. Following this, Mr. Sunak’s spokesperson confirmed that the chancellor had returned his US green card last October ahead of his first American trip as UK’s government minister.
Mr Sunak on the other hand has accused political opponents of "smearing" his wife to get at him.
Senior Conservative party figures and political analysts have told the Observer newspaper they think the furore over Rishi Sunak’s US green card and his wife’s tax affairs have put an end to his chances of becoming UK’s next Prime Minster. They now believe Boris Johnson will have to remove Mr. Sunak as chancellor in his next cabinet reshuffle following all these startling revelations.
Akshata Murthy says she will pay UK taxes on all overseas income
On Friday (8th April 2022) Ms. Murty decided to change her tax arrangements, telling the BBC she did not want to be a "distraction" for her husband. She said her tax arrangements had been "entirely legal” but added, "It has become clear that many do not feel it is compatible with my husband's role as chancellor. I understand and appreciate the British sense of fairness and I do not wish my tax status to be a distraction for my husband or to affect my family."
The BBC estimates Ms Murty would have avoided £2.1 million a year in UK tax through her non-dom status.
BBC Hindi Link : https://www.bbc.com/hindi/international-61112508
BBC Punjabi Link : https://www.bbc.com/punjabi/international-61119005
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