The Chancellor’s wife Akshata Murty issued a statement confirming she is a not tax domiciled in the UK.
I believe her statement of facts is wrong. And I also suggest HM Revenue & Customs could challenge her claim.
Domicile has nothing to do with a person’s nationality. Nor with not being able to have a British passport because a person holds citizenship from another country. And non-domiciled status is certainly never given for that reason.
It is given to no-one if they do not apply for it. Ms Murty is only non-domiciled because she asked to be so. She can also give up the claim to be non-domiciled at any time. The fact she’s still non-dom is a choice.
Non-dom status is about where a person’s natural home is. Essentially, it is a test based on the evidence they are only temporarily resident in the UK because they retain the intention to return to another place, their natural home.
There are many ways to prove where your natural home is. Family ties, or retaining other strong ties with the country you claim to be your place of domicile. For example, you own a house there and only rent in the UK because you intend to leave sometime soon. Making no strong ties with the UK, or choosing to educate your children in your natural home and not the UK are other ways of proving this is not your domicile. So too might holidaying there frequently.
What the Revenue here think – and legislation now backs this up – is that the longer you’re in the UK the less likely it is that your are domiciled elsewhere. The evidence of your behaviour then suggests that your home is really here.
But the Revenue can challenge anyone’s non-dom status whenever they wish (if only they had the resources to do so, of course, which is another issue). I suggest they could do this with Ms Murty.
She is reported to have four homes around the world, with her husband Rishi Sunak. Three are in the UK and one is in the USA, which is called a holiday home. I have heard no reports of a home in India, which does not help a domicile claim. That they choose to holiday in the USA and not India does not help either.
And being here for a long time, married to a man whose current career is only possible in the UK is not a good look for someone who claims to plan to leave sometime. As far as I know the children of this marriage are also educated here.
And we know Ms Murty is a donor to Winchester School, which shows a commitment to the UK and its establishment, which is often considered a sign of where you think your home might be.
All these facts together could they be enough for HMRC to open an enquiry to ask why she continues to think herself domiciled in India.
The evidence that as the wife of a senior government minister who very clearly has ambition to further his career in UK politics she is likely to remain in the UK, quite probably forever, looks to be particularly compelling to me.
So, my question is a simple one - is Ms Murty really non-domiciled at all now? I cannot answer the question, but there enough evidence to ask it.
Being non-domiciled is her choice, one she can withdraw at any time (albeit at significant financial cost).
In that case it is her job to justify it, and the statement she’s issued so far does not do that.
The Chancellor has a duty to get his wife to put the true facts on the table or drop her claim that saves tax.
Richard Murphy is Professor of Accounting Practice, Sheffield University Management School and Director of Tax Research UK
