Downing Street are getting a lot of attention at the moment in the press, and recently Rishi Sunak's wife's name has been thrown into the mix. The reports that I have seen in the media contain an implication of legal wrong doing on the part of Ms Murty with words like "avoiding" and "scheme" being used. However, while there are many tax avoidance schemes in the UK, this is not one of them. Ms Murty has filled her tax returns in the correct way and as set out in the law and HMRC guidance. This all turns on the question of domicile - a complicated UK concept that looks at the family origin of an individual together with the location of their permanent home. If you are UK domiciled, you must declare your worldwide income on your tax return and pay tax on that income. The same applies when you die - all your worldwide assets are subject to inheritance tax at 40%. However, if you are not UK domiciled then you can claim the remittance basis of taxation where your UK income and only foreign income that is brought into the UK is declared on your tax return. Further, on your death, only your UK assets are subject to inheritance tax. Every non domiciled individual can claim the remittance basis, and after a certain number of years there is a charge (either £30k or £60k) to claim the remittance basis. So from the reports it appears that Ms Murty has done everything correctly and so the offer now to declare her entire worldwide income on her tax return is in answer to the moral/ ethical question of what the Chancellor's wife should be doing given her husband's position in the UK. 

What is clear is that domicile, residence and tax is an extremely complex issue and one that needs thorough investigation. Gone are the days when you could spend up to 183 days in the UK without needing to worry about the UK tax regime - for some this time could be as little as 16 days. This in turn could result in someone unwittingly being classed as a UK resident and after 15 years being deemed to be UK domiciled. Even without overseas wealth like Ms Murty, this could have huge financial implications. We are advising more and more clients on their residence and domicile position, including setting out clear indications of how many days they can spend in the UK without triggering residency and what can be done with their overseas assets before they become UK deemed domiciled. It is vital that people are armed with this information early on, ideally before they enter or soon after they move to the UK.