Labour is calling on Rishi Sunak to be more transparent about his finances after the prime ministerial candidate declined to answer questions about the source of hundreds of thousands of pounds he loaned to a company that he jointly owned with his wife.
The move is the latest request for the former chancellor to explain details about how he has managed his family’s fortune, which is said to total £730m and has led to him being routinely referred to as the UK’s richest MP.
The vast majority of the Conservative leadership candidate’s wealth is derived from his marriage to Akshata Murty, a member of the family that founded the Indian technology group Infosys, in which she owns a stake worth about £690m.
However, Sunak also worked in the hedge fund industry between 2006 and 2013, raising questions about whether the loans that he personally made to his UK business came from profits generated in international tax havens.
James Murray, the shadow financial secretary to the Treasury, said: “Rishi Sunak wants to be our next prime minister, but again it seems he is unable to give a straight answer to questions over his relationship with tax havens. It is hard to avoid the impression he has something to hide.”
Between 2013 and 2014, Sunak loaned £652,449 to Catamaran Ventures UK, a company he jointly owned with Murty at the time, according to documents filed at Companies House.
The loans were made shortly after Sunak had worked in America between 2010 and 2013 for the US branch of the hedge fund Theleme Partners, where he managed three entities based in the US tax haven of Delaware.
Sunak was entitled to a share of the profits made by one of the Delaware entities, US filings suggest, while industry sources said he was also likely to have invested his own money into the hedge fund.
“Rishi has never used or benefited from a tax haven,” Sunak’s spokesperson said, adding that all of Theleme’s US profits were subject to “full US tax”, and that “all profits within the Theleme management company group are taxed either in the UK or in the US as applicable”.
However, the spokesperson declined invitations to say whether Sunak had made the loans to the UK company from an overseas bank account – or if the loans had been made from an overseas corporate account, which might potentially have saved Sunak taxes on bringing the money into the UK.
Days before becoming an MP in 2015, Sunak transferred his share of the UK company and the loan to his wife, a transaction that would have been largely tax free.
There is no suggestion that Sunak has broken any tax laws and he has insisted that he has “always been a completely normal UK taxpayer”.
However, the former chancellor has occasionally been embarrassed by his ties to people with less conventional tax arrangements.
In April, Sunak and his family were criticised for potentially avoiding £20m in taxes via Murty’s “non-dom” status. After days of negative coverage, she agreed to pay UK tax on her worldwide earnings in future and for the last tax year, but she continues to be a non-domiciled citizen.
Murty has also been revealed to be a shareholder in a restaurants business that funnelled investments through a company in the tax haven of Mauritius – a structure that could allow its backers to avoid taxes in India. The largest individual shareholder in that business – International Market Management (IMM) – is Hugh Sloane, the co-founder of the hedge fund Sloane Robinson, which was found to have operated a tax avoidance scheme by a tribunal in 2012.
Sunak’s boss at Theleme, Patrick Degorce, was forced in 2013 to pay millions of pounds in tax after a ruling concerning a personal investment in a complex film financing scheme, which sought to shelter earnings of almost £19m.
Meanwhile, a joint-venture between Sunak’s billionaire in-laws and Amazon was revealed last year to be in a multimillion-pound dispute with the Indian tax authorities.
August 6, 2022 at 11:03AM Simon Goodley