Rishi Sunak’s rise to the top was almost derailed as his family’s finances came under intense scrutiny during his time as Chancellor of the Exchequer.
The “non-dom” status of the incoming prime minister’s wife, Akshata Murty, prompted questions from across the House as the arrangement reportedly saved her millions while the cost of living soared.
The fashion-designer daughter of a billionaire who married Mr Sunak in 2009, is thought to be worth hundreds of millions of pounds and the couple made the Sunday Times Rich List in May, with a combined fortune of £730 million.
Ms Murty’s non-dom status typically applies to someone who was born overseas and spends much of their time in the UK but still considers another country to be their permanent residence.
While the set up is legal, critics said the use of the scheme looked bad at a time when the then Chancellor increased the tax burden on the British public.
Her status meant she did not pay UK tax on foreign income or gains but paid an annual charge of £30,000 to keep that status.
It was estimated that this could have saved her £20 million in taxes on dividends from her shares in Infosys, an Indian IT company founded by her billionaire father.
Mr Sunak said his wife was entitled to use the non-dom arrangement as she is an Indian citizen and plans to move back to her home country to care for her parents.
Following the controversy, Ms Murty declared that she would pay UK taxes on all her worldwide income.
Mr Sunak referred himself to the then prime minster Boris Johnson’s independent adviser on ministerial interests as he sought to fend off questions over his family’s financial affairs.
While he said he was confident he had acted appropriately at all times, his “overriding concern” was that the public should have confidence in the answers.
He was later cleared of breaching the ministerial code by Mr Johnson’s standards adviser.
The disclosure, along with the revelation that Mr Sunak retained a US green card while he was Chancellor, was widely seen to have damaged his position as a frontrunner to replace Mr Johnson as prime minister.
In April, an Ipsos poll found half of the public had a lower opinion of Rishi Sunak than they did the previous year.
Mr Sunak also came under pressure over his wife having a £400 million stake in Infosys, which continued to operate in Russia after the country’s invasion of Ukraine.
A statement from the company is reported to have said there was a “small team” based in Russia that services global clients but that the firm did not have “any active business relationships with local Russian enterprises”.
Infosys’s Russia office reportedly closed earlier this year and was seeking replacement roles for its Moscow staff abroad.
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