Rishi Sunak considered resigning as chancellor last week amid a torrent of stories about his wife having non-domicile tax status in the UK, it has been revealed.
It was reported by The Independent last week that Sunak’s wife Akshata Murthy, who is worth around £700m personally and is the heiress to a £3.5bn fortune, was a non-domicile and paid tax on her overseas earnings to India.
Murthy is unable to get British citizenship, unless she renounces her Indian citizenship, and made £11.9m last year on dividends from her shares in Mumbai-listed shares.
The chancellor at first said attacks on his wife were a smear, that she paid all her tax on British earnings to HM Revenue and Customs and that she would not be changing her tax status as ministers and Tory MPs briefed to the media that Sunak may have to resign.
The Sunday Times reports that Sunak considered resigning, with one source close to chancellor saying that he “was considering whether he could withstand his family taking this any more”.
Sunak instead decided to stay in the job, but he has now moved his wife and two daughters out of Downing Street and to the family’s mews home in West London.
He has also launched an inquiry into how his wife’s tax status became public knowledge, with an ally saying that the leak could be a criminal offence.
Murthy also changed her tax designation on Friday so that she will pay tax on all her earnings in the UK in an apparent bid to try and save her husband’s political career.
However, she still has non-dom status in the UK, which will save her paying hundreds of millions of pounds in inheritance tax.
Speaking to the BBC today, police minister Kit Malthouse said: “They recognise there was a disconnect perhaps in the British public’s understanding of what is appropriate and they’ve corrected that situation now for the future.
“[Murthy] recognised there had been a sense of fair play that had been offended by her particular tax arrangements.”
Sunak came under even further pressure when it was revealed by Sky News that he held a US green card – which means he pledged to pay some tax to the US every year and that America would be his forever home – up until last year.
One minister told City A.M. that Sunak’s position looked untenable while he was increasing the UK tax burden to the highest level in 70 years.
“He simply won’t be able to tell voters that we’re ‘all in this together’ after the past week,” they said.
A cabinet minister told The Times: “This might well make him walk away.”