Infosys, one of India’s largest software companies, has reported an increase in its dividend, with a significant payout for the leader of the opposition, Rishi Sunak, and his wife, Akshata Murty.
The IT outsourcing company has increased its interim dividend by 16.7% this year, according to its latest results, meaning Murty could receive a payout of up to £7.5m on her holding, which is now worth around £703m.
The businesswoman may have to pay as much as £3m to the Treasury for this year’s dividend alone after she said she would pay UK tax on her worldwide income in 2022.
The wife of the then prime minister made the step after it was revealed she used non-domicile status, meaning she did not have to pay tax in Britain on her global income.
The Sunaks were the wealthiest couple in history to live at 10 Downing Street and ranked 245th in the Sunday Times Rich list this year.
Bengaluru-headquartered Infosys was co-founded by Murty’s father, Narayana Murthy, who left the company’s management in 2014, although she retains a stake.
The company’s performance in the six months to the end of September means Murty’s shareholding of 0.94% resulted in a dividend of about £7.5m this year, assuming she did not pay any tax on the sum in India.
With the UK’s top dividend tax rate of 39.35% applied this would generate a tax bill of £2.9m on the payout from Infosys to Murty. India does sometimes impose taxes on resident and non-resident dividend payments on shares, known as a withholding tax.
The potential payment to the UK Treasury is indicative of the kind of funds the government is hoping to glean from Britain’s wealthiest residents in order to improve the state of the government’s finances.
The Labour party’s manifesto said it would press ahead with the Conservative government’s decision to scrap non-dom status, a tax break that allows applicants to avoid paying tax on their worldwide income in return for paying an annual levy of £30,000.
However, there is an ongoing debate about its execution, over concerns it could prove to be a net-negative for the exchequer if it encourages wealthy people to quit the UK.
The chancellor, Rachel Reeves, is reportedly weighing how a new residency regime aimed at replacing the status will apply from April 2025.
One in five UK bankers use non-dom status, according to analysis by tax experts, and concerns have been raised that replacing it with a four-year residency regime – as originally proposed by Reeves’s predecessor as chancellor, Jeremy Hunt – might have a damaging effect on the financial sector.
Treasury sources have suggested Reeves will not take steps on taxation on an ideological basis, instead favouring what raises the most for the exchequer.
