The British tax system is insanely complex by design. Normal people are not meant to be able to understand it. And while most normal people probably don’t understand “non-dom“ status, they have at least heard of it. And they’ve heard of it because it is the single most egregious, most outrageous tax loophole in the entire system, which no comparable country anywhere in the world has anything like.
Every time a major politician is exposed as being a “non-dom” they have, usually within days, given up the status (which they will deliberately have asked for, it is not awarded without being sought out), because they know it to be so obviously indefensible.
Non-doms claim that they’re not really British, that they’re just passing through, before returning to the promised land, their real home, even if they weren’t actually born there and have hardly been there. When Zac Goldsmith first tried to become a Tory MP, he had to give up his non-dom status extremely quickly indeed, as his public attempts to defend his status became more and more laughable. (He was born in Chelsea and Westminster Hospital. His father, James Goldsmith, also claimed to the taxman to not *really* be British, despite running a British political party. He got away with it).
The non-dom claim made by Akshata Murty, Rishi Sunak’s wife, is considerably less laughable. She is Indian. She was born and raised there. And if she had n’t met her de ella now-husband de ella (at Stanford University, in the US), it is reasonable to imagine she might never have come to live in Britain at all – just as her money de ella appears not to have done.
But there are aspects that remain entirely laughable. The first is her statement of her on the matter, that her non-dom status of her is somehow to do with not being allowed to hold dual Indian and UK nationality. There is no shortage of Indian nationals living in the UK, living in this predicament. One doubts there are very many who have been forced into it by quite such creative tax arrangements. One of the more laughable defenses for non-dom status was attempted by business secretary Kwasi Kwarteng, on TimesRadio on Thursday morning. It has “been around for two hundred years”, he said. Rishi Sunak’s grandparents were Indian nationals who came to the UK, via East Africa, in 1960. One suspects they did not trouble Her Majesty’s Revenue and Customs with requests for non-domiciled tax status.
It is a matter of some complexity, and quite deliberately so, but to convince HMRC of your non-domiciled nature, you must show that the UK isn’t really your home. That there is somewhere else calling you back one day, a property there, perhaps – or even a family burial plot.
One of the quirks of British political life is that the flat above 11 Downing Street is larger than the one above No 10, so the prime minister and chancellor regularly switch. And one of the consequences of that quirk is that there is, already, someone living in 10 Downing Street, claiming, for tax purposes, to not really live there.
Naturally, we wish Sunak and his wife a long and happy life together, but it does mean that, he should stay with his wife, then the man with very clear designs on becoming the British prime minister also, at least as far as Her Majesty’s Revenue and Customs is concerned, won’t be here forever.
This has already been put, by the way, to members of the government, if not to Sunak himself. Kwasi Kwarteng told Sky News that it wasn’t much to worry about as non-dom status expires after fifteen years. Which it does, though there are various curious and complex exceptions for Indian nationals.
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But it shouldn’t need to be stated that that is not a defense. Non-dom status expires after 15 years because that is the point at which HMRC thinks it’s no longer reasonable to believe your claim that you’re just passing through, that this isn’t really your home.
You can’t apply for non-dom status and say, “Look, I’m only going to max out this perk for 15 years, then I’m fully on board with you guys. God save the Queen.”
Fifteen years is just the point at which they stop believing you. So it is, at the time of writing, entirely legitimate to ask the man who wants to be the next prime minister, “When are you leaving?” And if the answer is never, then he will, sooner rather than later, be just the next Tory politician to wave goodbye to non-dom status – albeit, in this case, not his own – and be publicly humiliated into paying a fairer share oftax. It’s just particularly awkward when you’re the actual chancellor.