Rishi Sunak has made nearly £5m over the past three years thanks mostly to gains from his US investment fund, according to tax details that have been published.
Downing Street published a summary of the prime minister’s tax affairs on Wednesday, months after promising to do so and – in a move that showed the sensitivity of the information – in the middle of his predecessor Boris Johnson’s appearance before a parliamentary committee over Partygate.
Christine Jardine, the Liberal Democrat Cabinet Office spokesperson, said: “After months of promising to release his tax returns, I don’t understand why Rishi Sunak has snuck them out whilst the world is distracted with Boris Johnson’s Partygate grilling.”
According to the summary of his tax return, Sunak has made £4.8m over the previous three tax years. Only about £410,000 of that came from his MP and ministerial salary, however, with almost everything else coming from interest, dividends and capital gains on his US-based investments. According to the summary provided by Sunak’s accountants, those investments are held under a “blind management arrangement”, which meant he did not actually receive the gains as income but had to pay tax on them nevertheless.
In total the prime minister paid just over £1m in UK tax over the course of the three years, giving him an effective tax rate of 22%. He paid a further $51,648 in US taxes over the past three tax years because the US charges non-residents for tax due on dividends.
Angela Rayner, Labour’s deputy leader, said: “[The tax returns] reveal a tax system designed by successive Tory governments in which the prime minister pays a far lower tax rate than working people who face the highest tax burden in 70 years.”
Tax experts said the three-page document provided relatively limited insight into the prime minister’s full tax affairs.
Nimesh Shah, the chief executive of the tax advisory firm Blick Rothenberg, said: “To get a full picture of Sunak’s tax affairs I’d have liked to see the full return. This only tells part of the story.”
Some said the fact that Sunak paid less than a quarter of his gains in tax highlighted the problems with taxing capital gains at a much lower rate than income. “It isn’t about avoidance. The low tax rate is because we have much lighter taxes on wealth than work and these low rates aren’t uncommon,” said Arun Advani, economics professor at the University of Warwick.
Sunak’s personal wealth has been a sensitive issue for the prime minister. A former Goldman Sachs banker, he joined one of India’s richest families when he married his wife, Akshata Murty, the daughter of Narayana Murthy, the billionaire founder of Infosys.
The prime minister and his family own several properties including his constituency home, a Grade II-listed manor with a private lake and a newly built heated swimming pool. The pool will make such a large demand for energy that Sunak had to pay for the local electricity network to be upgraded.
He has paid to use a helicopter to travel from London back to his own North Yorkshire on more than one occasion.
Sunak promised to release his tax returns during the Conservative leadership contest, after revelations about his and his family’s tax affairs. Last spring it emerged Sunak had held a US green card while an MP and in the Treasury, and that Murty had saved millions on her UK tax bill by claiming non-dom status while her husband was chancellor. Murty stopped claiming non-dom status last year.
The move to offer some details of tax payments is not unprecedented. David Cameron published his tax return after the Guardian revealed his father, Ian, had run an offshore fund that avoided paying tax in Britain by hiring staff in the Bahamas. David Cameron held an interest in the fund, before selling it. The former chancellor George Osborne also published a short summary of his tax affairs.