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UK prime minister Rishi Sunak paid more than £400,000 in tax in the last financial year with his investments heavily skewed towards lightly-taxed capital gains, a report by his accountants has shown.
The published summary of Sunak’s taxes show he paid the government £120,604 on his £329,561 income for the year, a rate of 36.6 per cent. He paid £325,826 on capital gains of £1.64mn, a rate of 19.9 per cent.
The figures — which Sunak first promised to make public in November — were published at 4.30pm on Wednesday while Westminster was focused on former prime minister Boris Johnson’s evidence to the “partygate” inquiry.
The summary — only just over two pages long — confirms Sunak, a former Goldman Sachs banker, is a member of the UK’s super-rich elite, a potentially awkward issue for Downing Street during a cost of living crisis.
After a deduction of £13,937 for tax paid abroad, the prime minister handed over a total £432,493 to HM Revenue & Customs for the year to April 5 2022.
The 2022 Sunday Times rich list estimated Sunak and wife Akshata Murty had a joint net worth of £730mn, giving them almost twice the personal fortune of the then monarch Queen Elizabeth.
Notes from Evelyn Partners, Sunak’s accountants, said all the prime minister’s investment income and capital gains related to a “single, US-based investment fund”. The fund was the blind trust into which the prime minister put his investments upon entering government, the accountants said.
Chris Etherington, partner at accounting firm RSM, said the “most interesting thing” about the release was the weighting in favour of investments that produced capital gains, rather than dividends.
“It is understood that he does not influence the investment strategy of the blind management arrangement but it appears he has benefited from the difference in tax rates between capital gains and dividend income,” Etherington said.
Sunak received £172,415 in dividends, just £690 in interest on investments and £293 in bank interest in the year.
For additional rate taxpayers such as Sunak, most capital gains are taxed at 20 per cent, while dividends are taxed at 39.35 per cent in the current tax year.
The prime minister also paid $6,892 of taxes in the US in the 2021 calendar year, along with tax in some other, undisclosed jurisdictions.
A senior tax lawyer, speaking on condition of anonymity, said the prime minister had “sanitised” his personal affairs to exclude assets producing complex income streams, such as property or property funds.
“He’s a wealthy man who has managed his affairs carefully to avoid giving rise to messy or difficult questions,” the lawyer said.
Although Sunak’s allies say the prime minister has nothing to hide, revelations about his high income and big investments are politically awkward given the UK is facing a cost of living crisis.
Sunak owns four properties: a family home and apartment in Kensington, a large manor house in Yorkshire with heated swimming pool, and an apartment in Santa Monica, California.
While Sunak was chancellor of the exchequer under Johnson, he faced attacks because Murty held “non-domiciled” tax status, which allows some non-citizens to pay tax only on their income earned in the UK.
Murty, who holds a stake worth more than £500mn in Indian software company Infosys, which her father founded — subsequently agreed to pay UK tax on all her worldwide earnings.
Sunak is the first prime minister to make his tax affairs public since David Cameron. Sir Keir Starmer, Labour leader, has said his party’s leading figures will publish tax returns if his party wins the next general election.
Sunak has drawn criticism for publishing a summary from his accountants rather than the actual tax return. “Nicola Sturgeon published her full tax return — why couldn’t Sunak do the same thing?”, said Dan Neidle, founder of Tax Policy Associates think-tank.
Angela Rayner, deputy leader of the opposition Labour party, said it was right Sunak had published the figures “after much delay”.
But she added: “They 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.”
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