Rishi Sunak has been cleared of breaching the ministerial code over his wife’s tax affairs, in a report by the cabinet’s ethics adviser, Lord Geidt.
The chancellor asked the adviser on ministerial interests to look into his case amid accusations he had failed to be transparent about the non-domicile tax status of his wife, Akshata Murty, which meant she did not legally have to pay UK tax on her foreign earnings. She has since said she will voluntarily pay the tax.
Sunak was also forced to confirm he had a US green card and had declared himself a “permanent US resident” for tax purposes for 19 months while he was chancellor and for six years as an MP.
In advice to the prime minister, Lord Geidt wrote: “I advise that the requirements of the ministerial code have been adhered to by the chancellor and that he has been assiduous in meeting his obligations and in engaging with this investigation.
“In reaching these judgments, I am confined to the question of conflicts of interest and the requirements of the ministerial code. My role does not touch on any wider question of the merits of such interests or arrangements.”
Murty, a businesswoman whose wealth is estimated to be worth hundreds of millions of pounds, is an Indian citizen and is reported to hold a 0.91% stake in Infosys, an IT business founded by her father.
Her share is thought to be worth £11.5m a year, meaning she may have avoided up to £20m in UK tax by being non-domiciled in the UK. Murty has said she pays tax overseas.
Sunak told the Sun that Murty was entitled to use the non-dom arrangement as she was an Indian citizen and planned to move back to her home country to care for her parents.
While promising to pay UK tax on all income, Murty will retain her non-dom status, which could in future allow her family to legally avoid an inheritance tax bill of more than £275m.
In her statement, Murty said she did not want her non-dom status to be a “distraction” for her husband.
Geidt said he had asked the Treasury to examine “any specific circumstances which could have given rise to a conflict of interest” in relation to Sunak’s green card and Murty’s non-dom status. On the green card, Geidt said he did “not consider that its possession would constitute an inherent conflict of interest”.
He said the Treasury had not found any instances of conflict of interest. On Murty’s status, Geidt said there were two potential instances of conflicts of interest, the first where Sunak informed the permanent secretary of the potential risk when working on a policy incentivising inward investment.
The second instance, in 2021, involved the introduction of a new tax regime for asset-holding companies which involved “a tightly defined and limited change” for some non-doms. Sunak’s wife was not affected.
Geidt said he had concluded there had been no risk of conflict of interest in either case.