Rishi Sunak has admitted that he held a United States green card, giving him permanent residence in the country, while he was chancellor of the exchequer.
The revelation came amid scrutiny of the tax affairs of his wife Akshata Murty after it emerged that she has non-domicile status, allowing her to avoid paying tax in Britain on foreign earnings.
Mr Sunak’s spokeswoman said he did not give up his green card until October last year, when he made his first visit to the US as chancellor. She said he acquired the green card when he lived and worked in the US, but he retained it after he returned to live in Britain in 2013.
“Under US law you are not presumed to be a US resident just by dint of holding a green card. Furthermore, from a US immigration perspective it is presumed that permanent resident status is automatically abandoned after prolonged absences from the US. At the same time one is required to file US tax returns. Rishi Sunak followed all guidance and continued to file US tax returns, but specifically as a non-resident, in full compliance with the law,” she said.
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“As required under US law and as advised, he continued to use his green card for travel purposes. Upon his first trip to the US in a government capacity as chancellor, he discussed the appropriate course of action with the US authorities.
“At that point it was considered best to return his green card, which he did immediately. All laws and rules have been followed and full taxes have been paid where required in the duration he held his green card.”
Mr Sunak hit back on Friday against what he described as smears against his wife who owns around 1 per cent of Infosys, a technology company founded by her father. Her stake is believed to be worth hundreds of millions of pounds and her non-domiciled status means that she could avoid paying British tax on the dividends she earns from the company.
Citizenship
Mr Sunak said his wife chose non-domiciled status because she did not want to give up her Indian citizenship and dual citizenship is not allowed under Indian law. He said she planned ultimately to return to India to take care of her parents as they got older.
“I would hope that most fair-minded people would understand, though I appreciate that it is a confusing situation that she is from another country,” he said.
Boris Johnson said on Friday that he had not known about Ms Murty's tax status but he said Mr Sunak was "doing an absolutely outstanding job".
Labour’s shadow chief secretary to the Treasury, Pat McFadden, said the revelation about the chancellor’s green card begged further questions.
“Why did he keep a green card for so long while being a UK MP? Was there any tax advantage in doing so? And why did he give this up after holding it for so long?
Throughout the country households are struggling with the deepest cost-of-living crisis in decades,” he said. “Their bills are going up, their taxes are going up and they are finding it harder and harder to make ends meet.The arrangements revealed this week are not open to them.”
