Rishi Sunak’s wife Akshata Murty claim of UK non-dom status shines light on US citizenship tax

April 9, 2022 - Participants Include:

Diane Gelon - Diane@DianeGelon.com

John Richardson - @ExpatriationLaw

An earlier podcast with Diane Gelon is here.

In the 21st Century The Most Interesting Thing About A Person Is His Tax Residency!

The recent story of the Uk Chancellor Of The Exchequer Rishi Sunak and his wife Akshata Murty are evidence of this. The last week has featured story after story describing  how Ms. Murty was legally able to elect UK "non-dom status" to avoid paying UK tax on certain income sourced outside the UK. Apparently her claim of entitlement to her non-dom status has been based on the fact that she is a citizen of India and not a British citizen (and that she eventually plans to return to India). Predictably this has led to outrage - described here - from the general public.

The difficulties were compounded by the revelation that both Rishi Sunak and Askshata Murty are reported to have been US tax residents because they had Green Cards. Although it is not clear when the Green Cards were abandoned, it appears that Rishi Sunak held a Green Card when and after his UK political career began.

I have attempted to identify and describe a number of the issues in the following twitter thread:

https://threadreaderapp.com/thread/1512035483919998981.html

In this podcast I am again joined by UK based US lawyer Diane Gelon. In this episode we discuss:

- how the non-dom regime works and how it can benefit people (include US citizens) who wish to immigrate to the UK

- how and where Ms. Murty's non UK income might be taxed under the rules of international tax

- the effect of having the US Green Card and why that means that Mr. Sunak and Ms. Murty were also US tax residents (although apparently they used a tax treaty tie breaker to be treated as nonresidents from a US tax perspective)

- why the debate over Ms. Murty's non-dom status is really a public referendum on US citizenship taxation.

In the 21st Century the most interesting thing about a person is his/her tax residency, actual residence, citizenship and domicile!