4 Saturday April 9 2022 | the times
News
Rishi Sunak’s wife will help her family
to save as much as £400 million in
inheritance tax because she lives in the
UK with non-dom status.
The family of Akshata Murty, whose
father is one of India’s richest men with
an estimated £3.5 billion fortune, stand
to benefit because her estate would not
pay inheritance tax on any of her global
fortune should Murty die here.
In India there is no inheritance tax
and under a loophole included in a UK-
Indian treaty in 1956 her inheritance
The creditors of a failed boutique fit-
ness chain whose directors and share-
holders included Rishi Sunak’s wife are
considering legal action over an insol-
vency that left debts of more than
£6 million.
Suppliers are angry that Digme Fit-
ness placed orders just before adminis-
trators were engaged to carry out a fast-
track administration process.
ReSolve, the administrators, sold the
business, which had studios in London
and Oxford, back to the founders as
part of a “pre-pack” administration. It
has closed four studios. The suppliers
have unsuccessfully sought to retrieve
their money from Digme, which con-
tinues to trade but without its debts,
including £415,000 owed to HM Reve-
nue & Customs, understood to be for
VAT and PAYE/national insurance.
Directors of the company based in
Richmond, Surrey, included Akshata
Murty, who married Sunak in 2009.Creditors of failed fitness
chain consider legal action
She owned 4.4 per cent of the company
but is no longer a director.
Stefanie Clarke, 54, a director of
FreshTwist, which supplied Digme
with branded water bottles, has threat-
ened to bring a county court action
against Caoimhe Bamber, 50, a former
City lawyer who founded the company
with her husband, to recover a debt of
more than £2,000. She said: “We were
surprised Murty would be involved
with a company that appears to have
such little regard for suppliers, many of
whom are small businesses.”
Another supplier, 1 Stop Wash, a
small London-based laundry, is owed
more than £5,000.
Geoff Bamber, 40, Digme’s co-
founder and a former hedge fund man-
ager, said Digme’s “trading conditions
deteriorated rapidly in early Decem-
ber”. He said that the “board took im-
mediate insolvency advice when the
scale of the problem became clear”.
ReSolve declined to comment.
Murty was approached for comment.Alex RalphNews Politics
Chancellor’s wife can still save
David Byers Assistant Money Editor tax-free status would continue for ever,
even when her non-dom status in Brit-
ain expires after 15 years.
Any wealth Murty inherits from her
father will still be protected under the
loophole when she dies, meaning her
two children and any family she choos-
es to leave her wealth to will not pay tax
on her inheritance from India.
Despite volunteering last night to pay
UK tax on her global income, she has
retained her non-dom status, which
means her estate will still be exempt
from inheritance tax on her assets.
If Murty chose to shift her domicile
to the UK, giving up her non-dom
status, her estate would face a likely
inheritance tax bill of £462 million. This
assumes that her father dies before her
and that she, her brother and mother
are each left with £1.15 billion, a third of
his wealth.
However, as a non-dom, she would
only pay tax on her UK assets, which
would be a fraction of her Indian earn-
ings and assets.
Assuming that her British assets are
10 per cent of the total she owns, this
would leave her survivors with a tax bill
of only £46 million, a saving of £416 mil-lion. Even if she died before her father,
she currently owns a £700 million stake
in Infosys, so she would save at least
£280 million on her total wealth now.
A non-dom is someone who is resi-
dent in the UK but declares on their tax
return that their permanent home, or
domicile, for tax purposes is overseas.
Being domiciled overseas can be hugely
beneficial for people with significant
wealth as it means they do not have to
pay UK tax on non-UK assets.
The number of non-doms from India
is increasing more rapidly than from
any other country. In 2001 only 4 per
cent of all UK-based non-doms were
Indian compared with 14 per cent in
2018 — up from 3,200 to 22,700. Over-
all, there are 238,000 non-doms of all
jurisdictions living in the UK, up from
162,000 in 2001.
In recent changes to the rules, non-
dom status automatically ceases 15
years after the holder moved to Britain.
Murty, who pays a remittance of
£30,000 per year to be a non-dom, has
been here for nine. Her wealth contin-ues to mount up given the dividends she
takes from her father’s Indian business,
all of which are also tax-free in Britain.
She is understood to get about
£11.5 million a year in dividends from
Infosys. Because of the UK-India dou-
ble-taxation treaty, India can apply an
upfront tax of 15 per cent on the divi-
dend, which works out as £1.7 million.
This would leave her with £9.8 million.
“Being non-dom and taxed on the re-
mittance basis means that foreign earn-
ings, investment income and capital
gains can escape UK taxes as long as
those funds are not spent in the UK or
used in the UK indirectly,” Rachel de
Souza, a partner at RSM, said. “Those
funds may, of course, be taxed in
another jurisdiction.”
Nimesh Shah, chief executive at
Blick Rothenberg, the accountancy
firm, said: “If she elects for the remit-
tance basis of taxation in the UK — as
she can do as a non-dom — the monies
can be left in India and there would be
no further taxation in the UK.”NR Narayana
Murthy has a
£3.5 billion fortuneAkshata Murty and Rishi Sunak with