Akshata Murthy says she will pay all taxes in UK to avoid ‘distraction’

Ms. Murthy, who owns around 0.9% of Infosys stake, will now pay UK tax on an arising basis on all her worldwide income, including dividends and capital gains, wherever in the world that income arises

Akshata Murthy, the daughter of Infosys co-founder Narayana Murthy, has announced that she will pay UK taxes on all her income, including from India, to avoid the issue being a “distraction” for her husband, Chancellor of the Exchequer Rishi Sunak.

The 42-year-old entrepreneur has been at the centre of days of headlines after it emerged that her non-domiciled status meant she was not legally bound to pay taxes on her overseas income in the UK. Ms Murthy owns around 0.9% of Infosys stake and therefore receives millions in dividends from the Indian software services major.

"In recent days, people have asked questions about my tax arrangements: to be clear, I have paid tax in this country on my UK income and international tax on my international income,” Ms Murthy said in a statement released on Friday.

"This arrangement is entirely legal and how many non-domiciled people are taxed in the UK. But it has become clear that many do not feel it is compatible with my husband's role as Chancellor. I understand and appreciate the British sense of fairness and I do not wish my tax status to be a distraction for my husband or to affect my family,” she said.

"For this reason, I will no longer be claiming the remittance basis for tax. This means I will now pay UK tax on an arising basis on all my worldwide income, including dividends and capital gains, wherever in the world that income arises. I do this because I want to, not because the rules require me to. These new arrangements will begin immediately and will also be applied to the tax year just finished," she added.

Describing the UK as a “wonderful country”, Ms Murty – who has been based in Britain for nine years – noted that since arriving she has been made to feel more welcome than she ever could have imagined, in both London and Mr Sunak’s constituency home in North Yorkshire.

But even as the row around her "non-dom status" faced ongoing criticism by the Opposition Labour Party, Mr Sunak was hit with further media revelations. The British Indian finance minister’s spokesperson confirmed a report claiming that he had held a US Green Card while holding the Chancellor’s post at 11 Downing Street until around October last year.