Plan to scrap non-dom tax status 'is full of loopholes' for super-rich

Labour analysis finds Sunak’s family could save almost 250m

- Peter Walker

Conservative plans to abolish nondom status are riddled with loopholes worth hundreds of millions of pounds for the wealthiest people in the country, Labour has claimed.

Analysis by the party found the policy, announced by Jeremy Hunt in last month's budget, could theoretically see Rishi Sunak's family benefit from tax savings of nearly £250m.

The findings place renewed focus on Sunak's wealth - his most recent tax return showed a personal income of £2.2m - and the non-dom status of his wife, Akshata Murty, who owns a £690m stake in Infosys, the IT multinational founded by her father.

In 2022 it emerged that Murty had claimed non-domiciled tax status, which allows people to avoid UK tax on overseas earnings and had potentially saved her up to £20m. Murty subsequently declared she would pay UK tax on overseas income, but did not give up her non-dom status.

Downing Street and the Treasury had previously condemned Labour's plan to abolish non-dom status to help fund the NHS as harmful to the UK's attractiveness to investors. But in a surprise turnaround, the chancellor announced he would axe the status, a move viewed by many as mainly motivated by a desire to limit new revenue sources for a future Labour government.

The Tories have sought to turn scrutiny over tax on to Labour, capitalising on claims that Angela Rayner, the party's deputy leader, failed to pay capital gains tax on the sale of her former council house. The liability is estimated to be up to £3,500.

Rayner says she is confident she has done "absolutely nothing wrong".

Under the scheme announced by Hunt, from next year people can only avoid taxes in the first four years of residency in the UK, as against the previous 15-year threshold.