An investigation by the Treasury and Cabinet Office is under way after details of Akshata Murty’s tax details were leaked to the Independent. Her status as non-domiciled has allowed her to legally avoid about £20m of UK taxes on dividends from the Indian IT company founded by her billionaire father on the understanding that her long-term permanent domicile is in India. Sunak initially responded to the story by saying it was a “smear”, but late on Friday Murty issued a statement saying she would in future pay UK tax on worldwide earnings. His wife and children moved out of Downing Street this weekend to their Kensington home, with Sunak expected to spend the weekends with his family. Labour has accused Sunak of hypocrisy over tax avoidance in his own family while putting up national insurance for millions of people. Sunak’s team believe someone in Downing Street is a Labour supporter who has leaked details of Murty’s tax status for political reasons. However, an ally of Sunak – not one of his aides – believes it is people around Boris Johnson who are responsible. On Sunday another cabinet minister, Sajid Javid, was also drawn into the furore as he admitted having taken advantage of non-dom status before he became an MP. He released a statement saying he was a non-dom for six years while a banker, on the grounds that his father was born in Pakistan. Javid was born in the UK, and it is not clear where, if anywhere, he paid tax on worldwide earnings. He said: “Prior to returning to the UK and entering public life, some of my financial investments were based in an offshore trust. While this was an entirely legitimate arrangement, on becoming a minister in 2012 I decided to voluntarily collapse that trust, repatriate all assets to the UK and pay 50% income tax on those assets. “This approach deliberately incurred the heaviest possible tax burden, and offset any accrued benefits from the previous trust arrangement, but I believed it was the right thing to do.” Sunak was strongly defended by Kit Malthouse, the crime minister, who said the chancellor had been a “remarkable force of good” by bringing in the furlough scheme during the pandemic. “He is a smart, clever, committed politician who came into parliament with me and I have been deeply impressed by him ever since. I’m a big fan,” he told Sky News.
