What is a green card?
The green-card system allows
foreign nationals to live and
work permanently in the US
without becoming a citizen.
To qualify for the
permanent resident status it
confers, applicants must be a
relative of a US citizen or a
foreign national wanting to
work and live in the US. They
must pay US tax on their
worldwide income and
pledge that the US is their
permanent home.
Why did Rishi Sunak and his
wife have green cards?It is thought he applied for
the card after studying at the
University of California in the
early 2000s, where he met
his wife, Akshata Murty. The
pair later lived and worked in
America and still own a home
in Santa Monica, California,
which is valued at about
£5.5 million.
Sunak worked for various
investment firms, including
Goldman Sachs, and set up
his own business in the US,
Theleme Partners, in 2010.
He returned to the UK in 2013
to stand for election as a
Conservative MP but did not
give up the green card and
held it for nearly two years as
chancellor.Harry Yorke4POLITICS
Taxing
questions
threaten
chancellor’s
political life
Rishi Sunak was flying high after the pandemic, but
revelations about his wife’s tax status and his US green
card have sent the ambitious chancellor’s ratings into
free fall — and his opponents cannot contain their glee
For a man who watched with incredulity
and not a little disapproval when the per-
sonal and political fused into a crisis for
Boris Johnson, the past week has been
difficult for Rishi Sunak and his team.
When the news broke on Wednesday
night that his wife, Akshata Murty, the
daughter of a billionaire, was non-domi-
ciled in Britain for tax purposes, the
chancellor faced a choice: defend his
family or put his political career first by
getting her to pay tax in Britain on her for-
eign investments.
“I want to protect my wife and I think
her privacy matters,” Sunak told his team.
They knew something would have to give,
but as the public criticism mounted,
Sunak “dug in”, refusing to pressure his
wife into altering her personal tax affairs.
Instead, Sunak considered whether toresign. No one in his inner circle told him
he should quit, but to those whose coun-
sel he sought, it was clear he was pre-
pared to go.
After a disastrous 48 hours in which
his political judgment was questioned,
his wife announced she would pay tax.
The affair now threatens to damage his
chances of succeeding Johnson in No 10.
In an attempt, perhaps, to insulate his
family from the scrutiny of the Downing
Street goldfish bowl, the chancellor has
moved his wife and two daughters out of
their grace-and-favour flat. For the past
two weeks they have been spending more
time at Sunak’s mews house in Kensing-
ton, so they are near his elder daughter’s
primary school during her final term. But
it was only yesterday that removal vans
arrived to shift their furniture.
This weekend, there are some close to
him who still think he might walk away
from politics, a view that news of the
move is likely to fuel.
In keeping with the image he has pro-
jected of punctilious personal propriety,
when Sunak became a minister in 2018,
he sat down with Helen MacNamara, the
head of propriety and ethics, and talked
her through his own finances, reportedto amount to £200 million, and that of his
wife. He moved his own investments into
a blind trust and revealed both that his
wife was a non-dom and that they both
held green cards, handed to those with
permanent residence in America and an
obligation to file a US tax return.
“They over-declared,” one of his aides
said. “People in government knew the
tax status of Akshata... they didn’t need
to. He also told them about the green
card. And now they have been screwed.”
Sunak told his permanent secretary in
both departments where he has worked,
the Treasury and Local Government, but
even his closest aides had no idea about
Murty’s status, something that would
surely have become an issue in a leader-
ship contest.her paying less tax — when in fact not pay-
ing tax on her foreign earnings would have
saved her at least £4.4 million last year.
By the next morning it was clear that
the interview had landed, as one senior
Tory put it, “like a cow pat”. Another
said: “That interview was fundamentally
stupid. The idea that there’s no advan-
tage in being a non-dom is nonsense. And
telling people it was overcomplicated is
nuts. It’s very simple. Man raises taxes,
wife doesn’t pay taxes.”
By Friday morning, Murty had got her
own PR adviser — Sarah Sands, the
former editor of BBC Radio 4’s Today —
and then issued a statement saying she
would pay that tax in the UK. However,
she insisted, that as an Indian citizen, she
would keep her non-dom status — a move
that will protect her from hundreds of
millions of pounds in inheritance tax.
Sources say her decision was made in a
desire to protect her own reputation.
“This was a private decision by a private
person,” one informed source said. “The
reason she did it was because she has a
life here. She takes the kids to school, she
goes to the gym. She doesn’t want to be
seen as someone who has broken the
rules. It was nothing to do with him.”
A Treasury official said Murty had
come to the decision in her own time:
“There will be criticism that we didn’t get
out and deal with it fast enough but when
the personal meets the political it is much
more difficult.”
Sunak’s team say the prime minister
has been “super supportive”, contacting
the chancellor at least twice to offer his
backing and told his team to offer “full-
throated” support. But Johnson, who
gave up his American citizenship so he
didn’t have to pay US taxes, was also “a
bit baffled” by Sunak’s retention of his
green card. When aides tried to explain
to him on Friday that the chancellor had
still paid US tax until last year, the prime
minister said: “Tell me about this green
card thing again. I don’t understand ...”
The contrast between the two men’s
tax affairs is also instructive. On his sec-
ond mayoral election campaign in 2012,
Johnson was attacking his rival Ken Liv-
ingstone’s tax avoidance and his strate-
gist Lynton Crosby ordered an audit of
Johnson’s taxes. “They found he was
paying too much tax,” one adviser
recalled. “The whole thing was
shambolic. Lynton said to him,
‘You’re lucky you’ve got a crap
accountant’.”
The question that lingers is:
what does this mean for
Sunak? He has revealed his
political naivety when
No 10 has become
intensely more politi-
cal. On Friday morn-
ing, David Canzini,
Johnson’s new politi-
cal director, told min-
isterial aides: “Make
no mistake about it,
we are now in the
long campaign for the
general election.”
In what could beBurnt!
TIM
SHIPMANChief Political CommentatorAre the tax affairs of the chancellor’s
spouse any of our business?
Have your say at sundaytimes.co.uk/pollJohnson’s taxes. “T
paying too much
recalled. “The
shambolic. Ly
‘You’ re lucky
accountant’
The ques
what doe
Sunak? H
politica
No 10
inten
cal.
ing,
Joh
cal
isteiste
no
we
lon
gen
IANALYSIS
On Wednesday evening, as the story
broke in The Independent, senior figures
in Conservative campaign headquarters
advised Sunak’s team that their defence
would not hold and that Murty would
have to change her tax arrangements to
kill the story. They were ignored.
By Thursday evening, when Sky News
claimed he had a green card, implying a
permanent allegiance to the US, MPs and
friends who had invested time and effort
in a potential leadership campaign were
horrified that Sunak could be so naive.
One longstanding friend said: “His
wife is his biggest blind spot. You can’t be
a chancellor and you can’t be prime min-
ister where your wife is a non-dom, par-
ticularly at a time when you are increas-
ing everyone’s taxes. You just can’t.”
Once the most popular minister as a
result of his Covid-19 furlough scheme,
Sunak’s popularity was already in freefall
after his spring economic statement in
which he blocked a plan to raise support
for families hit by rising fuel costs from
£200 to £500 and instead emphasised a
future income tax cut. He had also resisted
pressure from Johnson to reverse their
planned rise in national insurance.
Sunak took a principled stance that
there was no point trying to alleviate the
affects of high oil prices on households
until the level of the oil price was clear in
the autumn, the next time the energy
price cap goes up. But because his pack-
age was dismissed as too little, Sunak did
not get the credit for the £9 billion he
spent on a fuel duty cut and a shift in
national insurance thresholds.
“He didn’t grasp the politics,” one frus-
trated supporter said. “You have to be
seen to be doing something.” Some close
aides knew it was not enough, but he
ignored them. “He’s hugely stubborn,”
the source added. “That was the biggest
waste of £9 billion I’ve ever seen because
he got no political credit.”
It all comes amid fresh tensions
between 10 and 11 Downing Street. Sunak
had spent weeks resisting Johnson’s calls
for the government to invest billions in
nuclear power stations. Senior Tories say
the chancellor is unconvinced by John-
son’s belief that Russia will lose the war in
Ukraine. “He thinks Putin will still be
there and there will have to be a deal with
him and if that’s the case is it really worth
the pain to the economy,” one said. This
view has never been made public before.
Treasury sources are also clear that
Sunak actively considered resigning last
September when No 10 bounced him into
a £12 billion pledge to fund social care
reform. Several aides urged him to quit
then and others wondered whether he
should have done so when the Partygate
scandal broke.
Tensions are bad enough that one
Sunak ally, speaking without the author-
ity of him or his aides, accused Johnson’s
aides of leaking Murty’s tax status: “I
know someone is briefing full time
against Rishi in No 10. There are people in
there who want to get rid of him because
if the PM gets into trouble they want there
to be no alternative leader.”
However, Johnson and his senior aidesseem to have had no idea about the non-
dom issue. A source close to the chancel-
lor said: “I genuinely don’t think it was
them. I think it was a leak from govern-
ment to Labour and then to the media.”
Nonetheless, advisers who have
clashed with Sunak’s team could not con-
tain their glee when the story broke. Tory
advisers called the chancellor and his
wife “Rishi Notax and Akshata Murky”.
Their WhatsApp groups were a cascade
of smiley and laughter emojis. Asked if
there was a specific anti-Treasury Whats-
App group, one replied: “That’s all of
them, I think.”
Insiders report there were also tense
exchanges at a policy unit awayday on
Thursday between No 10 staff and those
working for Sunak, with No 10 people say-
ing it was “not our job to make your boss
look good” and complaining that the Trea-
sury had been “no help” during Partygate.
However, it was one of Johnson’s advisers,
Dougie Smith, the man behind No 10’s cul-
ture wars, who advised Sunak to “dig in”
and fight, rather than perform the U-turn
most wanted. “Dougie’s playbook is to dis-
miss all criticism as a ‘smear’,” said one
longstanding strategist.
In an interview with The Sun, Sunak
said: “To smear my wife to get at me is
awful.” He explained that Murty wanted to
move to India to care for her parents when
they were elderly. He also sought to
excuse her tax arrangements as “compli-
cated” and claimed they did not involveHis wife
is his
biggest
blind
spotDubbed
Rishi
Notax and
Akshata
Murky