Things could go from bad to worse for the chancellor after it was revealed that he himself could have held permanent residency status in another country during his first year as chancellor.
According to Sky News reports, Rishi Sunak and his wife, Akshata Murthy, held green cards in the US until more than a year into his chancellorship – before then giving it up during his period at the Treasury.
Holders of a US green card are required to pay US tax on their worldwide income, and to pledge the US is their forever home.
The US government website says the card is only for people who “make the US your permanent home” – which would be odd for someone holding multiple jobs in government, including local government minister, chief secretary to the Treasury, and chancellor.
A source close to Mr Sunak said “neither of them have green cards”, but refused to answer questions over whether they had them during any of his period as chancellor.
Done “nothing wrong”
The Chancellor has come out swinging today over his wife’s non-domiciled status.
Sunak said his spouse – who is estimated to be worth hundreds of millions of pounds – had done nothing wrong in choosing a financial arrangement that means she is not legally obliged to pay tax in Britain on foreign income.
He has blamed Labour for the “awful” smears against his family, but The Daily Telegraph reported that unnamed allies of the Chancellor claimed the Prime Minister’s office were behind the leaks – an allegation No 10 and No 11 strongly denied.
A No 10 spokeswoman told the PA news agency: “It is categorically untrue that No 10 is behind the briefings.
“The Prime Minister and Chancellor are united.”
Mr Sunak told The Sun newspaper that Ms Murty was entitled to use the so-called “non-dom” arrangement as she is an Indian citizen and plans to move back to her home country to care for her parents.
The fashion-designer daughter of a billionaire married the Chancellor in 2009 before he became an MP.
She is reported to hold a 0.91 per cent stake in Infosys, an IT business founded by her father, with The Guardian reporting that the share is worth £11.5 million per year to Mr Sunak’s wife.
The paper also reported Ms Murty had potentially avoided up to £20 million in UK tax by being non-domiciled.
With Ms Murty born in India and her father also from the south Asian country, UK Government rules allow her to list India, rather than the UK, as her permanent residence, meaning different tax rules on foreign earnings apply.
The Chancellor said it was “unpleasant” to read attacks on his wife “especially when she hasn’t done anything wrong”.
“She hasn’t broken any rules. She’s followed the letter of the law,” Mr Sunak told The Sun.
The Chancellor said his partner “pays full UK tax on every penny that she earns here in the same way that she pays full international tax on every penny that she earns internationally”.
Asked during the interview whether he thought his family were victims of a “Labour smear campaign”, Mr Sunak said he did.
But Labour hit back, with a party source telling PA: “The Chancellor would do better to look a little closer to home.
“It’s clear that No 10 are the ones briefing against Rishi Sunak and, after his failure to tackle the cost-of-living crisis, you can understand why.”