Non-dom status of UK Chancellor's heiress wife could have saved her 4.4m pounds in UK tax: Report

UK's Chancellor of Exchequer Rishi Sunak is scrambling to quell a row over his billionaire heiress wife's 'non-dom' status amid claims she could have avoided millions of pounds in UK tax, Daily Mail reported.

Akshata Murthy, whose father is one of India's richest men, is facing scrutiny after it emerged she has kept the status despite living in 11 Downing Street with the Chancellor and their children.

It means she was not liable for tax on overseas earnings, including dividends from her father's company that reportedly came to 11.6 million pounds last year. That sum could have meant paying 4.4 million pounds to HMRC.

A spokeswoman for Murthy pointed out she is an Indian citizen and stressed she pays UK taxes on UK income. There is no suggestion any laws or rules have been broken.

However, reforms brought in by the Tory government in 2015 stated that non-dom status is intended to "support those from overseas who come to the UK but don't intend to stay here permanently".

Labour Party chief Keir Starmer said the arrangements appeared to represent "breathtaking hypocrisy" and showed Sunak is "out of touch" with ordinary people, Daily Mail reported.

Shadow Business Secretary Ed Miliband said there was no legal issue but pointed out the government was making Britons pay more tax, after the national insurance hike came in on Wednesday.

"He is the UK Chancellor asking people to pay more in taxes. Is it right that his immediate family is sheltering from UK taxes? I think Rishi Sunak and his family should reflect on that," he told Sky News.

Miliband also sparked questions by suggesting non-dom status should have been abolished by the last Labour government - although it is not clear whether that is the party's current position.