In 2023, Rishi Sunak paid over £500,000 in taxes after earning a profit of £1.8 million on his investment in a US fund. This information was revealed in a summary of his tax records.
The document released by the prime minister on Friday revealed that he paid a tax amount of £508,308 in the fiscal year 2022-23, based on his total earnings and profits of £2.23m.
The individual’s effective tax rate in the UK was 23%, which is significantly less than the highest rate of 45%. This is due to a portion of their income being taxed in the US and the lower capital gains tax rate of 20%.
Sunak has essentially been increasing income taxes due to the halt on tax thresholds and the temporary increase in national insurance. However, the main rates for capital gains have not changed during his tenure as both chancellor and prime minister.
After the release, the Trades Union Congress (TUC) posted on Twitter: “It is puzzling why Rishi Sunak increased income tax but not capital gains tax.”
The prime minister earned a total income of £139,477, which was only 7% of his overall earnings for the year. Along with a gain of £1.8m, he also received a dividend of £276,218 and earned £17,189 in interest from savings and an investment fund in the US.
The tax filing will prompt inquiries into why Sunak’s assets seem to be primarily located in the US instead of the UK.
As per Sunak’s accountants’ report, the investments were managed under a “blind management arrangement,” which resulted in him not receiving the profits as income. However, he still had to pay taxes on them.
At the same time, the chancellor, Jeremy Hunt, released his tax report. It revealed that he paid £117,418 in taxes on an income of £208,547 and a capital gain of £208,058.
Hunt’s income included £27,370 from a rental property and £35,997 in dividends.
In 2023, Sunak released his tax return which revealed that he earned almost £5 million in the past three years primarily from his US investment fund.
The prime minister has faced criticism for his personal fortune and connections to the United States. Sunak, who previously worked at Goldman Sachs and managed a hedge fund, became part of one of India’s wealthiest families through his marriage to Akshata Murty, daughter of Narayana, the billionaire founder of Infosys.
In April 2022, Sunak faced criticism for holding a US green card during his time in office. This declaration classified him as a “permanent US resident” for tax purposes for 19 months while he was chancellor and for six years as an MP. Murty also faced criticism when it was revealed that she was a non-dom, but she has since promised to pay taxes on all income worldwide moving forward.
The prime minister and his family possess multiple properties, including their residence in Richmond, located in North Yorkshire. The property is a Grade II-listed manor that features a private lake and a recently added heated swimming pool. The installation of the pool required an upgrade to the local electricity network, which was funded by Sunak.
“The executive director of Tax Justice UK, Robert Palmer, expressed surprise at the prime minister’s low tax rate despite earning millions. He stated that this is a result of our flawed tax system, where individuals who make a majority of their income from wealth, like the prime minister, are taxed at a lower rate compared to those who rely on employment income. It is necessary to address this issue and ensure that income from wealth is taxed at an equal rate to income from work.”
Source: theguardian.com
