London: Akshata Murthy, the wife of UK Finance Minister Rishi Sunak, has said she will stop avoiding UK tax on her overseas earnings – bowing to pressure her husband had previously dismissed as political libel.
Public anger over Murthy’s tax status has been heightened by her husband’s decision to hike payroll taxes at a time when soaring inflation leaves Britons facing the biggest cut in the cost of living since the start of recordings in 1956.
Murthy, an Indian citizen, is eligible for so-called ‘non-domiciled’ status in Britain, a status available to foreign nationals who do not consider Britain their permanent residence. This allowed her to choose to pay UK tax only on income she earned or transferred to Britain.
Murthy is the daughter of one of the founders of Indian IT giant Infosys and owns around 0.9% of the company, earning her a dividend payout worth £11.6m ($20 million) last year.
In a statement on Friday evening London time after two days of critical media coverage, Murthy said she would pay UK tax on her aggregate income, including dividends and capital gains, for the year of taxation 2021/22 and in the future.
“I understand and appreciate the British sense of fairness and I don’t want my tax status to be a distraction to my husband or affect my family,” she said.
Murthy said her previous tax arrangements were “entirely legal” and she would continue to claim India, not Britain, as her home. Sunak previously said she intended to return to India to care for her parents when they become infirm.
Sunak has been touted as the successor to Prime Minister Boris Johnson, whose own position has been called into question after widespread criticism over illegal parties held in Downing Street during the COVID-19 lockdowns and a series of other scandals.