Researched by: Sara Varghese

The golden boy: Meet Rishi Sunak

Here’s a quick catch-up on his life history:

• Born in 1980, he belongs to a Punjabi family that emigrated to West Africa, and then to Britain. His father was a family doctor who then started a pharmacy business.
• Sunak studied in a series of prep schools—where he was popular and described as a “high achiever.”
• He graduated from Oxford University with honours—and a passion for competitive ballroom dancing (we kid you not). 
• After a brief stint at Goldman Sachs, he opted for an MBA at Stanford—which is where he met Narayana Murthy’s daughter Akshata. They married in 2009 and now have two daughters.
• He returned to the UK to enter politics, and became an MP from Yorkshire in 2015. 
• And his rise since has been no less than meteoric: Minister for Local Government in January 2018, Chief Secretary to the Treasury by July 2019—and in February 2020, Chancellor of the Exchequer, which is the Brit equivalent of a finance minister.

Richer than the queen: Meet Akshata Murty

Here are the basic details:

• 42-year old Murty spent her childhood with her grandparents in Hubli—while her parents moved to Mumbai for work. Her parents being Infosys founder and tech billionaire Narayana Murthy and his wife Sudha.
• Later, as a teenager, she was raised with austere Murty values—without television and evenings dedicated to “pursuits that brought the family together in a productive environment”—i.e. homework.
• She studied economics and French at Claremont McKenna College—and then moved to the Fashion Institute of Design and Merchandising in Los Angeles.
• Murty worked briefly at Deloitte and Unilever before returning to Stanford University for her MBA—which is where she met Sunak. 
• They were married within four years in 2009—and now have two daughters.
• Despite her pedigree and experience, Murty’s entrepreneurial ambitions have never quite been fulfilled. A fashion label she founded in 2009 collapsed within three years.
• Murty’s incredible wealth primarily is a result of her investments—including her stake in her father’s company Infosys.

Richer than the queen: Here’s the source of Murty’s incredible moolah:

• A 0.93% stake in her papa’s company Infosys—which is worth more than £690 million (Rs 68.5 billion), making her richer than the Queen who is worth a paltry £365 million (Rs 36.2 billion). 
• That stake also earned her around  £11.6 million (Rs 1.1 billion) in dividends just in the last year. 
• The couple jointly owned London-based Catamaran Ventures UK, which invests in startups “with the view to future capital growth and income distributions.” But Sunak transferred his shares to her just before entering parliament, leaving her the sole owner.
• Murty has a 5% stake in a company called International Market Management (IMM)—which also operates Jamie Oliver’s Pizzeria, Jamie’s Italian and Wendy’s outlets in India.
• She has direct shareholdings in at least six other UK companies—including New & Lingwood, which sells tailcoats to Etonians and silk dressing gowns for £2,500 each.
• Soroco, a software company co-founded by her brother, lists Murty as a director of its UK arm.

A lavish lifestyle: Unlike her parents, Murty and Sunak have no problem enjoying their money. They own at least four homes—including a £1.5 million (Rs 149 million) Georgian mansion in Yorkshire, £7 million (Rs 695 million) five-bedroom home in Kensington and a £5.5 million (Rs 545 million) penthouse in Santa Monica, California. The Yorkshire home earned Sunak the teasing nickname ‘Maharaja of the Dales’. But all that wealth has become a political albatross—with Murty’s investments sparking one media scandal after another.

2020: The first season of scandal

Murty’s money first became a problem in 2020—when The Guardian published a series of investigative pieces on Sunak’s finances. They yielded two big revelations—which were not illegal but not quite ethical either.

One: As a minister, Sunak must declare his financial information to be recorded in the official register of ministers’ interests. The ministerial code requires Sunak to disclose anything that is “relevant” to his role as Chancellor. He must also reveal interests of their close family (including spouses and in-laws) which pose a potential conflict. 

But, but, but: Sunak’s entry only mentioned his wife’s ownership of Catamaran Ventures—the company whose shares he transferred to Murty.  

Why this mattered: For starters, the omission of the main source of the couple’s fabulous wealth—the Infosys stake—was glaring. As The Guardian noted, ministers are held to a higher level of disclosure than MPs. And the code of conduct states they must provide a “full list in writing of all interests which might be thought to give rise to a conflict.” And Sunak’s list was far less than “full.”

Also this: At the time, Infosys had scored contracts worth £22 million (Rs 2.18 billion) with the UK government since 2015. Plus this: “Infosys has also worked for the Home Office and has signed a framework agreement with Whitehall, which means it can be awarded contracts without competition.” This made Murty’s Infosys stake very much relevant—and should have been disclosed even if it was not a problem.

Point to note: When asked, the Johnson government said it was entirely satisfied that Sunak “has followed the ministerial code to the letter in his declaration of interests.”

Two: Also tricky: Murty’s 5% stake in International Market Management (IMM)—which Sunak did not disclose either. Founded by an investment banker, IMM does not directly invest in India. Instead, it funnels money into a shell company in Mauritius called IMMASSOCIATES—which then invests the money in two Indian subsidiaries. As with all offshore companies, this is a tax dodge. IMM’s investors avoid paying a 20% capital gains tax imposed by the Indian government if and when the business is sold. And they only pay 5% in taxes on any income earned via dividend—as opposed to 10%.

Point to note: In this case, Murty was ducking paying taxes to India not the UK. Again this is standard for many foreign and Indian investors. And it isn’t illegal as long as Murty is not ‘roundtripping’—i.e. sending money from India to Mauritius and then channelling it back into India. There’s no evidence of that.

Why this mattered: Again, this became a question of ethics rather than the law. What may be a “standard approach” for many companies is not appropriate for Rishi Sunak—who is the equivalent of his country’s finance minister. He should not be profiting from any wealth accrued from dodging another nation’s tax laws. As one social justice activist says: “If the minimising of Indian tax revenues is ‘standard’ for British investors, that’s not a justification, it’s a condemnation… India needs its tax revenues for schools and hospitals.”

The main takeaway: The 2020 scandals were about appearance of propriety rather than any actual wrongdoing. And with the firm backing of 10 Downing Street, the questions about Murty’s money soon faded away… until they returned with a vengeance over the past month.

2021: The second season of scandal

Part one, Russia: The first controversy involved Infosys’ operations in Russia. In line with the UK’s economic sanctions on Moscow, Sunak has been calling on UK companies to cease all business operations in Russia. The problem: His wife gets a hefty income from her stake in Infosys—which had an engineering centre in Moscow at the time. This ‘double standard’ became a talking point when Sunak was confronted by a Sky News anchor last month—and handled it poorly:

The fallout: This one was easily resolved. Infosys quickly rolled up operations in Moscow, and declared: “We do not have any active business relationships with local Russian enterprises.” Sunak, however, was off his PR game. After looking defensive on Sky, he went on to compare himself to Will Smith on a podcast, joking: “At least I didn't get up and slap anybody, which is good.”

Part two, the great tax dodge: On Wednesday, The Independent revealed that Akshata Murty has non-domicile status—and hence doesn’t pay taxes on her overseas income in the UK. Specifically, she doesn’t pay 39.35% in taxes—which is the going rate for UK taxpayers—on the dividend earned from her 0.9% stake in Infosys. No one knows exactly how much she has saved thanks to this status. The Guardian estimates she collected £54.5 million (Rs 5.4 billion) in dividends from Infosys since 2015. She would have paid as much as £20 million (Rs 1.9 billion) in taxes if she had been a normal taxpayer.

The non-domicile status: Here’s how it works:

• Any person who is a tax resident in the UK—citizen or not—can apply for this status. 
• They have to prove either that they have left the country and have no intention of returning. 
• Or they can show that while they live and work in the UK, their permanent home is actually in another country. This is typically “the country that their father considered their permanent home when they were born, and to which they intend to eventually return, perhaps when they retire.”
• The benefit of being a ‘non-dom’: The person does not have to pay UK tax on income and capital gains earned overseas—including stocks—unless they bring their money into the UK.

Murty’s defence: is as follows, as laid out by her spokesperson: 

“Akshata Murty is a citizen of India, the country of her birth and parents' home. India does not allow its citizens to hold the citizenship of another country simultaneously. So, according to British law, Ms Murty is treated as non-domiciled for UK tax purposes. She has always and will continue to pay UK taxes on all her UK income.”

Sunak echoed this defence last night, saying:

“What it comes down to is, my wife was born in India, raised in India… She has investments and a career independent of me. She had this well before we met, before she moved to this country. It wouldn’t be reasonable or fair to ask her to sever ties with her country because she happens to be married to me. She loves her country. Like I love mine, I would never dream of giving up my British citizenship. And I imagine most people wouldn’t.”

What’s missing: While that’s fair enough, Murty’s passport is actually irrelevant to her non-dom status—as in her citizenship does not require her to be a non-dom. What she doesn’t want to say is that she actively made that choice and applied for it. And to become a non-dom, she had to give strong proof of her intention to return to India—which is a bit awkward for the wife of a man considered a strong PM aspirant.

Where it gets trickier: There is nothing illegal about claiming non-domicile status—many rich people—including celebrities, billionaires and party leaders—do so. But none of them are married to the Chancellor Sunak—who is on track to become the “biggest tax-raising chancellors in postwar UK history”. The latest hike came at a time when the UK is experiencing the biggest fall in living standards since 1956/57 due to inflation. Hence, Labour leader Keir Starmer has been quick to pounce on the issue:

“The chancellor has imposed tax rise after tax rise on working people and he’s said time and again there’s no alternative, we’ve got no option. If it now transpires that his wife has used schemes to reduce her own tax, then that’s breathtaking hypocrisy.”

This isn’t good news for Sunak whose popularity has been plummeting in the polls thanks to his tax policies.

Where it gets positively murky: Murty and Sunak have refused to reveal where she pays taxes on her overseas income. Her spokesperson would only say that “international tax” was paid on her “international income.” So Labour leaders now want to know if she is keeping her money in a tax haven like Cayman Islands—to avoid paying taxes entirely. 

Point to note: It isn’t clear why Murty doesn’t just say she’s paying her taxes on her Infosys dividend in India—if that’s the case. But even if she were doing so, her tax rate would be much lower—10% as opposed to 20% thanks to the UK-India tax treaty. And this: “Because they are tax resident in the UK, non-doms will typically not be tax resident in their country of domicile, and therefore not liable for tax in either country on their worldwide income.” So it’s not clear what taxes she’s paying on her other offshore investments either.

Not just about Murty: This isn’t just about her money. Sunak has faced plenty of questions about the hedge fund he co-founded before he entered politics—and likely still profits from. See: the Moderna vaccine controversy.

The bottomline: Defending his wife, Sunak said: “She hasn’t broken any rules. She’s followed the letter of the law. And if she was living here and didn’t just happen to be married to me this obviously would not be at all relevant.”

And he’s exactly right. All this boils down to whether you view Murty as a private person—who should be allowed to use legal means to dodge taxes like any other rich person. But if you see her as Sunak’s wife, then this becomes about the family income of the chancellor—which is an entirely legitimate target. That’s just how politics works.

Reading list

BBC News offers a good overview of the political row over Murty’s non-dom status. Tatler has a detailed and mostly flattering profile of Rishi Sunak—for Akshata Murty, check out The Guardian. Also in The Guardian: The best guide to non domicile status—but you can also check out a detailed study into who is non-dom in the UK. Check out the paper’s 2020 investigation here and here.