Akshata Murty’s non-dom status is a choice not an obligation – tax experts

theguardian.com:

This is the government form that the chancellor’s wife Akshata Murty will have filled in to apply for non-domiciled status in order to avoid paying UK tax on tens of millions in dividends collected from her family’s Indian IT business empire.

When it was revealed on Wednesday that Murty is a non-dom, and thereby is not required to pay UK tax on about £11.5m in annual dividends from her stake in Infosys, her spokeswoman said Murty “is treated as non-domiciled for UK tax purposes” suggesting that she had no control over her UK tax status.

However, all UK residents must actively apply for non-dom status by filing in government tax form SA109 to claim the tax relief.

Murty’s spokeswoman suggested that because Murty is an Indian citizen she cannot also hold UK citizenship and therefore must be treated as a non-dom for UK tax.

Akshata Murty is a citizen of India, the country of her birth and parents’ home. India does not allow its citizens to hold the citizenship of another country simultaneously. So, according to British law, Ms Murty is treated as non-domiciled for UK tax purposes. She has always and will continue to pay UK taxes on all her UK income”.

However, several leading international tax experts have disputed this and said tax domicile status is not connected with a person’s nationality. Those resident in the UK do not have to have a British passport in order to pay British taxes, meaning Murty could have paid UK tax at any time.

Richard Murphy, a professor of accounting at Sheffield University management school and tax justice campaigner, said: “Domicile has nothing to do with a person’s nationality. Nor does it have anything to do with not being able to have a British passport because a person holds citizenship from