Rishi Sunak’s wife claims non-domicile status

[Whorty]

This is a flat-out untruth pushed by a few govt apparatchiks this morning. Nothing stops her being treated as UK resident for tax purposes - indeed, it would be easier for her this way rather than applying for non-dom status.

Isn't that like saying it's easier for everyone on here going through a brollie rather than going LTD, and yet we put the effort in as there is a tax benefit. And we don't want to pay more tax than we legally have to, so why should others (just because they are better off than us and we're jealous of their wealth)?

[mattster]

Isn't that like saying it's easier for everyone on here going through a brollie rather than going LTD, and yet we put the effort in as there is a tax benefit. And we don't want to pay more tax than we legally have to, so why should others (just because they are better off than us and we're jealous of their wealth)?

No, the point I was making is that she is in no way "forced" to be non-dom because of her Indian citizenship - this is a lie being pushed by some outlets this morning. She has made an active effort to become non-dom. Fair enough, it's legal and we'd all do it if we could, but clearly against the spirit of the law (and possibly the letter, depending on whether or not you really believe that the UK is not her settled home). From a political point of view it seems almost recklessly stupid as the public tends to hate this sort of thing so it will be interesting to see how this one pans out.

[d000hg]

Since her business interests lie in India, is there perhaps some political weight from their side too though? Some cachet in being an Indian tax payer when she is doing business over there? No idea, but wouldn't be surprised.

[mattster]

Since her business interests lie in India, is there perhaps some political weight from their side too though? Some cachet in being an Indian tax payer when she is doing business over there? No idea, but wouldn't be surprised.

Her interests in India I believe (don't quote me) are limited to passive dividend income from Infosys, which she plays no part in running. She has/had quite a few UK based business interests (another strike against non-dom), some of which received quite large Covid payouts and at least one of which has folded since without paying it back.
I believe if she renounced her non-dom status she would still pay div tax in India at the lower rate, and would pay the difference up to the UK rate here.

[d000hg]

If I had 500 mil, I don't think I'd care about squeezing every penny out of tax efficiency but I wouldn't be at all surprised she has been told professional advice to go non-dom.
They disclosed it to the "conflict of interest group" in 2018 IIRC and you'd think someone would have given them advice on the non-financial aspects of all this because it's obviously going to be found out. Seems odd we only find this out now, but in reality I can't see it mattering. The people who dislike the Tories will not only be having their opinions confirmed, and those who like them will probably say "good for her I'd do exactly the same".

[mattster]

The people who dislike the Tories will not only be having their opinions confirmed, and those who like them will probably say "good for her I'd do exactly the same".

Maybe so, but the group in the middle of those is the most/only important group electorally. Middle England doesn't like tax avoidance as a rule, whatever the legalities. This may not be the killer blow to Sunak on its own, but then again it might be. Avoiding tax whilst raising it on everyone else in the middle of a cost of living crisis isn't going to do much for his popularity, which was already plummeting before this revelation. Good news for Truss, anyway, although she is actually far less popular than Big Dog or Rishi already and she hasn't even made it into the public consciousness yet.

[malvolio]

Maybe so, but the group in the middle of those is the most/only important group electorally. Middle England doesn't like tax avoidance as a rule, whatever the legalities. This may not be the killer blow to Sunak on its own, but then again it might be. Avoiding tax whilst raising it on everyone else in the middle of a cost of living crisis isn't going to do much for his popularity, which was already plummeting before this revelation. Good news for Truss, anyway, although she is actually far less popular than Big Dog or Rishi already and she hasn't even made it into the public consciousness yet.

Unless something goes disastrously wrong for the Western allies over Ukraine, I think Boris's position is pretty secure for a while to come. Any challenge will come from left field anyway, Rishi is dead in the water and Truss has too much baggage: there are some good people on the backbenches who might have a chance. Don't forget who actually elects prime ministers, and why...

[hobnob]

Whilst it's a little bit hypocritical of Rishi to ask us all to pay more, to be fair to her she's not actually doing anything wrong. And as we have all run LTDs at some stage to (legally) reduce our tax burden I don't think we can really complain.

There's a guidance note here:
Guidance note for residence, domicile and the remittance basis: RDR1 - GOV.UK (www.gov.uk)

In particular, it has a flowchart to determine where you're domiciled (see attachment). In this case, I'd say it's pretty straightforward:

Q1: What are your plans for the future?
A2: To remain in the UK

Q2: Settled long-term commitment or shorter term plan?
A2: Long term

Conclusion: You are domiciled in the UK

As I understand it, non-dom status would make sense when someone comes over for a few years (e.g. on a university degree). So, the closest analogy to contracting might be the 24 month rule for travel expenses. Sticking with that analogy, the key question is "do you expect to be in this location for more than 2 years?", i.e. you can't keep claiming for the first 1 year + 364 days then say "Wow, what a complete surprise, I'm still here at the 2 year mark". In Murty's case, is she really expecting to leave the UK any time soon?

[d000hg]

So why was she able to claim this? Is it something you apply for or do you self-assess like the PSC box on your tax return or how you used to self-assess IR35 and only if you get audited did it ever come to light you were dodgy?

[mattster]

So why was she able to claim this? Is it something you apply for or do you self-assess like the PSC box on your tax return or how you used to self-assess IR35 and only if you get audited did it ever come to light you were dodgy?

"Plans for the future" = "Leave the UK"? Plans can change, of course..

Who knows, they're all at it and rarely get much scrutiny but I'm sure this will now be picked over until we get some sort of answer. Someone suggested elsewhere that owning a house in the UK was pretty much the death knell for a non-dom application, so it will be interesting to see ownership details of the 4 places they have here (none in India, incidentally). What's the betting these are all owned through offshore shell companies etc? No wonder we are so slack on these sorts of regulations in the UK when our chancellor is benefiting so directly.