[Politics] Tory meltdown finally arrived [was: incoming]...

[The Fits]

The problem is it’s all desperately predictable. Create an ‘other’. This time, conveniently, an Asian woman. Possibly force Sunak out. Replace with some other corrupt cronie.
And then what? Same old. Whilst totally avoiding the actual issue here. These people do it because they can, and as long as people can they will.
It’s absolutely perfect for Johnson.

 

[beorhthelm]

So the Chancellor's wife has shares in a business that operates in Russia as well as also practicing Tax avoidance of UK Tax ?

That is the Chancellor's wife deciding to avoid UK Tax.

well not quite, but the jobs done now. how fast it happens.

 

[nicko31]

So the Chancellor's wife has shares in a business that operates in Russia as well as also practicing Tax avoidance of UK Tax ?

That is the Chancellor's wife deciding to avoid UK Tax.

Dear oh dear oh dear.


Off you pop, Rishi

The Russia thing was made about to be bigger than it was in IMO. But to have have a non-dom wife whilst simultaneously punishing earned income is just a terrible look

The days of British deference needs to end

 

[peterward]

Cripes.

That isn't a good look for the chancellor.

I don't like the chancellor or this government but this really is a non story imho.... Labour trying to Frame "look at his Mrs as non dom as he raises NI on poor families"

I'm not a fan if the NI rise, but his Mrs is an Indian citizen and passport holder,she is not a British citizen/passport holder. India doesn't allow dual citizenship, I read she spends more than 6 months each year in India (where her father has successful business Infosys that she is a shareholder in), she does pay her taxes on UK business interests/employment in full.....

So not sure what the story is except, non dom chancellor wife, NI rise, working families can be used in as soundbites to create a narrative.

If you or I as British passport holders, spent less than 6 months a year working in India, and paid all Indian taxes for our working there, should we pay to India taxes for our UK shares in our fathers UK company?

There is nothing illegal or improper its just framed as such.

 

[Thunder Bolt]

The ministerial code states an MP’s spouse is open to investigation.
View attachment 146691

She claimed furlough for staff but is registered at non dom, so doesn’t pay tax to the UK

I don't like the chancellor or this government but this really is a non story imho.... Labour trying to Frame "look at his Mrs as non dom as he raises NI on poor families"

I'm not a fan if the NI rise, but his Mrs is an Indian citizen and passport holder,she is not a British citizen/passport holder. India doesn't allow dual citizenship, I read she spends more than 6 months each year in India (where her father has successful business Infosys that she is a shareholder in), she does pay her taxes on UK business interests/employment in full.....

So not sure what the story is except, non dom chancellor wife, NI rise, working families can be used in as soundbites to create a narrative.

If you or I as British passport holders, spent less than 6 months a year working in India, and paid all Indian taxes for our working there, should we pay to India taxes for our UK shares in our fathers UK company?

There is nothing illegal or improper its just framed as such.

Look at rule 7:3

He didn’t declare it. The reason there is a fuss is because the Ministerial code has been trashed (yet again).
Johnson is a pass master at it.

Our country is ruled on trust, and there is no trust, at all.

 

[beorhthelm]

Look at rule 7:3

He didn’t declare it. The reason there is a fuss is because the Ministerial code has been trashed (yet again).
Johnson is a pass master at it.

Our country is ruled on trust, and there is no trust, at all.

we're told status and assets where informed to treasury and cabinet office. they've determined they dont warrant a declaration, presumably as foreign. the ministerial interests list records specific interests related ministerial responsibilities. it not chapter and verse on financial arrangements.

its telling those calling for explaination dont mention a breach of anything, they know there isnt. its stirring the pot to make a political point, and we can look forward to more bringing family into politics as its now seen as fair game.

its also a good distraction from finding out earning under 34k will net gain from NI changes.

 

[Westdene Seagull]

Exactly.
With the ridiculous cost of living I have had to stop my work pension contributions. Very annoying as it was pretty much the only benefit I get from work through their contribution. Plus it means I won’t have a worthwhile work pension when I come to retire.
Luckily, I don’t have to provide for a family but if I had kids, I’d be up shit creek.


Edit
Additionally, for try first time in my working life I have just applied for universal credit this afternoon and am eligible for a modest but helpful monthly amount.
Ridiculous that I work on average 55-70 hours a week and need government assistance!

I do understand a lot of the blame lies with the company I work for.

Anyway. Football.

And that is where the 'system' is utterly screwed. As someone in full time employment ( more than full time ! ) you shouldn't require benefits. Nobody, and I mean nobody, should earn less then £30k a year. One of my recent jobs I managed a support desk for a major company, some engineers were on just above £20k a year - highly technical people. Thankfully I managed to persuade my directors to increase all pay above £30k - and of course that means the government get more NI and tax. The idea of a low wage economy ( as Johnson and Rishi want ) is counter productive to the wealth of the nation as a whole. Government and employers are equally to blame. I'm in the fortunate position of not working, by choice, but am looking for my next role - it amazes me the shit some employers come out with when you speak to them - they clearly don't understand it's now an employees market and I've told a number of those that have approached me to bugger off.

 

[Machiavelli]

does no one feel at all uncomfortable at the digging at his wife? seems to have become target of the season. the tweet ignores all the basic details and article overlooks that non-doms pay dont pay taxes on overseas earnings as they are taxed overseas.

If you can unearth similar posts you made when the media piled in on Cherie Blair, Justine Thornton, etc, I'd have a certain sympathy for your point.
But that would also to draw equivalence between the cases, and I'm not sure there is. Why this is somewhat fairer is that the Tories are the party that have facilitated and done diddly squat to tackle extremes of wealth. The marriage of our Chancellor of the Exchequer -- about the richest MP -- with a non-dom is newsworthy in itself. When you factor in that the taxes he's recently introduced are burdened disproportionately on the working poor, and not on the non-/working affluent AND that the disparity between the rich and poor is at its starkest throughout the entirety of human history, yes, it's fair game.

A clue: it's not The Independent that perpetrate the most uncomfortable digging of our media.

 

[Thunder Bolt]

Look at rule 7:3

He didn’t declare it. The reason there is a fuss is because the Ministerial code has been trashed (yet again).
Johnson is a pass master at it.

Our country is ruled on trust, and there is no trust, at all.

Just to correct myself, the Chancellor did declare it when he became the Treasury Minister. The fact remains that non dom status is a choice for tax avoidance but she still claimed tax for furlough.

Btw, does anyone else think this is part of operation Protect Big Dog?
Was dishy Rishi getting too popular?

 

[rippleman]

I don't like the chancellor or this government but this really is a non story imho.... Labour trying to Frame "look at his Mrs as non dom as he raises NI on poor families"

I'm not a fan if the NI rise, but his Mrs is an Indian citizen and passport holder,she is not a British citizen/passport holder. India doesn't allow dual citizenship, I read she spends more than 6 months each year in India (where her father has successful business Infosys that she is a shareholder in), she does pay her taxes on UK business interests/employment in full.....

So not sure what the story is except, non dom chancellor wife, NI rise, working families can be used in as soundbites to create a narrative.

If you or I as British passport holders, spent less than 6 months a year working in India, and paid all Indian taxes for our working there, should we pay to India taxes for our UK shares in our fathers UK company?

There is nothing illegal or improper its just framed as such.

There is absolutely nothing illegal in claiming non UK domicile status.

We assume that she is a tax resident of both the UK and India. In order to be a tax resident in India you have to be physically present there for more than 182 days in a tax year. If she is a resident for Indian tax purposes then she is liable to Indian tax on her worldwide income. The highest marginal rate of Indian taxes is 30%. The highest marginal rate of UK tax is 45%.

By claiming non UK domicile status her worst case scenario is that she is achieving a 15% saving in taxes (on a simplistic basis).

Of course we don't know that she is spending 6 months of each tax year in India. Seems a little unlikely but we have to give her the benefit of the doubt. We also have to assume that she is reporting all of her global income in India and none of it is hidden away in tax havens and is not being reported.

If she isn't a tax resident of India it opens up all sorts of possibilities!

But there is absolutely nothing that prohibits her from declaring that she intends to live out the rest of her days in the UK and considers herself to be domiciled in the UK and therefore pays tax here on her worldwide income and gains. Nothing at all. Then the provisions of the UK/India Double Taxation Agreement come into play to eliminate the double taxation of income in both the UK and India (if she is regarded as a tax resident there). Effectively (and again somewhat simplistically) she would pay tax at the highest rate in the two countries (which would be the UK).

 

[beorhthelm]

If you can unearth similar posts you made when the media piled in on Cherie Blair, Justine Thornton, etc, I'd have a certain sympathy for your point.
But that would also to draw equivalence between the cases, and I'm not sure there is. Why this is somewhat fairer is that the Tories are the party that have facilitated and done diddly squat to tackle extremes of wealth. The marriage of our Chancellor of the Exchequer -- about the richest MP -- with a non-dom is newsworthy in itself. When you factor in that the taxes he's recently introduced are burdened disproportionately on the working poor, and not on the non-/working affluent AND that the disparity between the rich and poor is at its starkest throughout the entirety of human history, yes, it's fair game.

A clue: it's not The Independent that perpetrate the most uncomfortable digging of our media.

fair comment, this has probably always been practice. i question why its newsworthy now, you'll point to the tax change but theres been plenty of opportunity to highlight before. its been put on the grid for this week.

 

[Machiavelli]

fair comment, this has probably always been practice. i question why its newsworthy now, you'll point to the tax change but theres been plenty of opportunity to highlight before. its been put on the grid for this week.

Others are speculating on the why now question, which is fine, but I'd just rather not.

Edit: I do think the non-dom question warrants further attention. Ed Miliband proposed getting rid of it when opposition leader, for instance. I know others won't agree with this, but we don't even need to speculate where we'd currently be if the public were more receptive to him in the 2015 GE.

 

[Machiavelli]

There is absolutely nothing illegal in claiming non UK domicile status.

We assume that she is a tax resident of both the UK and India. In order to be a tax resident in India you have to be physically present there for more than 182 days in a tax year. If she is a resident for Indian tax purposes then she is liable to Indian tax on her worldwide income. The highest marginal rate of Indian taxes is 30%. The highest marginal rate of UK tax is 45%.

By claiming non UK domicile status her worst case scenario is that she is achieving a 15% saving in taxes (on a simplistic basis).

Of course we don't know that she is spending 6 months of each tax year in India. Seems a little unlikely but we have to give her the benefit of the doubt. We also have to assume that she is reporting all of her global income in India and none of it is hidden away in tax havens and is not being reported.

If she isn't a tax resident of India it opens up all sorts of possibilities!

But there is absolutely nothing that prohibits her from declaring that she intends to live out the rest of her days in the UK and considers herself to be domiciled in the UK and therefore pays tax here on her worldwide income and gains. Nothing at all. Then the provisions of the UK/India Double Taxation Agreement come into play to eliminate the double taxation of income in both the UK and India (if she is regarded as a tax resident there). Effectively (and again somewhat simplistically) she would pay tax at the highest rate in the two countries (which would be the UK).

Great post. And you're right, the key question is where is she domiciled. The better journalists will be digging around this issue currently. Could be fatal to the Dishi one if it's not India.

 

[schmunk]

Great post. And you're right, the key question is where is she domiciled. The better journalists will be digging around this issue currently. Could be fatal to the Dishi one if it's not India.

Not going to happen - she's definitely India domiciled unless she has herself made an election at some point during her adulthood to be UK (or elsewhere) domiciled, and she will not have done this - if she had, HMRC would have already enquired into her tax returns.

In fact, looking into Rishi's own background, he has a reasonable shout of being non-UK domiciled himself, as it flows from one's parents at birth and he was born in the UK to Indian parents. He would however be caught by the fairly recent (since 2017, so introduced by the Tory government!) 'deemed domicile' rules which mop up these potential tax losses from UK-born people.

The only potential slip for his wife is that these deemed domicile rules also catch people who are not UK born, but have been UK tax resident for at least 15 of the previous 20 tax years. If she falls foul of this, she would then need to rely on the UK/India double taxation treaty which will give a limited relief against double taxation but wouldn't prevent the UK taxing most Indian sources (with credit for the Indian tax).

 

[Machiavelli]

Not going to happen - she's definitely India domiciled unless she has herself made an election at some point during her adulthood to be UK (or elsewhere) domiciled, and she will not have done this - if she had, HMRC would have already enquired into her tax returns.

In fact, looking into Rishi's own background, he has a reasonable shout of being non-UK domiciled himself, as it flows from one's parents at birth and he was born in the UK to Indian parents. He would however be caught by the fairly recent (since 2017, so introduced by the Tory government!) 'deemed domicile' rules which mop up these potential tax losses from UK-born people.

Thanks for this. Does this indicate that you're a tax accountant?

 

[rippleman]

Just to add a bit of historical context, Thatcher produced a green paper proposing the abolition of domicile as a tax concept so effectively proposing that the UK would no longer operate as a tax haven for non-domiciled individuals. The oil and shipping companies pitched up to Downing Street and threatened to remove all their operations from the UK if she went ahead. The proposal was quickly dropped.

Since when, of course, the deemed domicile concept was extended to include income and capital gains taxes (it had always existed for Inheritance Tax) as schmunk correctly points out above.

The Sunaks married in 2009 so she will be deemed domiciled here in 2023/24 or 2024/25 and will then be subject to tax on her worldwide income and gains with relief against her UK tax liability for Indian (or other) taxes paid up to the highest rate of UK tax. Effectively this means she pays the highest marginal rate of tax between the jurisdictions (which at current rates means that she will pay 45% tax in UK and get credit for 30% Indian tax).

There is never going to be a political will to dispense with the non-domiciled concept in UK taxation because there are too many vested interests in keeping it going. (see also Tory peer Lord Ashcroft et al). This report is from 2010 but does suggest why the UK being a tax haven for non-doms is here to stay.

https://www.channel4.com/news/factcheck/how-many-non-dom-peers

 

[Thunder Bolt]

Sometimes you just have to have a chuckle.

[tweet]1511995580700057604[/tweet]

 

[vegster]

Great post. And you're right, the key question is where is she domiciled. The better journalists will be digging around this issue currently. Could be fatal to the Dishi one if it's not India.

Already doing the rounds on twitter, her and husband Rishi own four homes in total three in the UK and one listed as a " Holiday home " in the US....strangely, no properties in India ?

 

[Blue Valkyrie]

Whether Rishi manages to loophole this or not, it is a terrible, terrible look for the UK Chancellor's wife to be avoiding UK Tax.

 

[schmunk]

Already doing the rounds on twitter, her and husband Rishi own four homes in total three in the UK and one listed as a " Holiday home " in the US....strangely, no properties in India ?

None of which has anything particular to do with the UK tax concept of domicile.

Domicile is very 'sticky'. Once a domicile has been established (generally at birth) there needs to be a complete renouncement of that domicile before a new domicile can be established elsewhere. This can be done by one's parents as a chikld, but she grew up in India and her parents live there still, along with her only sibling.

To prove that Mrs Sunak has a UK domicile, HMRC would have to evidence that she intends to live in the UK indefinitely, with no intention of ever returning to live in India, and that she does not still consider India to be her "Home", regardless of her current residence, career, etc.

Domicile is a common law (non-statutory) concept so for anyone wanting to know more the best place to start is probably HMRC's internal manual: https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittance-basis/rdrm20000